Fairness in Monetary Policy: A Critical Analysis of Instruments and Institutional Bias

Abstract

This article critically examines the fairness of modern monetary policy by evaluating the instruments, institutional frameworks, and theoretical assumptions that underpin it. Using a qualitative, document-based methodology, the study explores how conventional tools—such as interest rate adjustments, inflation targeting, and quantitative easing—affect socio-economic equity. Findings reveal that these instruments often yield regressive outcomes, disproportionately benefiting financial elites while burdening vulnerable populations. The analysis also uncovers institutional biases within central banking structures that prioritize market confidence over distributive justice. The research integrates theories of distributive justice, post-Keynesian economics, institutional critique, and the capabilities approach to develop a normative framework for assessing monetary fairness. Policy innovations, such as expanded central bank mandates, participatory governance, and ethically designed digital currencies, are proposed as pathways toward more inclusive monetary systems. This study contributes a novel, justice-oriented perspective to monetary policy analysis and advocates for structural reform that aligns economic governance with the principles of fairness and social accountability.