Are central banks responsible for the widening wealth gap?

To steer their policies, central banks are embracing unorthodox models that use “heterogeneous agents” unlike the “representative-agent New Keynesian” model. They also now have various tools to select from. Some purchase shares in companies, which are predominantly held by the rich. Others offer more affordable financing to banks that extend loans to smaller entities. Every tool will play a unique role in enhancing aggregate demand and the distribution of income.