Price level changes and the redistribution of nominal wealth across the Euro area
Adam, Klaus
;
Zhu, Junyi
URL:
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https://ub-madoc.bib.uni-mannheim.de/36175
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URN:
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urn:nbn:de:bsz:180-madoc-361758
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Document Type:
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Working paper
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Year of publication:
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2014
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The title of a journal, publication series:
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Working Paper Series
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Volume:
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14-11
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Place of publication:
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Mannheim
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Publication language:
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English
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Institution:
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School of Law and Economics > VWL, Internat. Wirtschaftsbeziehungen (Adam)
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MADOC publication series:
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Department of Economics > Working Paper Series
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Subject:
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330 Economics
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Classification:
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JEL:
E31 , D31 , D14,
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Keywords (English):
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inflation , redistribution , Euro Area , household survey
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Abstract:
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We document the presence of sizable distributional effects from unexpected price level movements in the Euro Area (EA) using sectoral accounts and newly available data from
the Household Finance and Consumption Survey. The EA as a whole is a net winner of
unexpected price level increases, with Italy, Greece, Portugal and Spain being the biggest
beneficiaries, and Belgium and Malta being the largest losers. Governments are net winners
of inflation, while the household (HH) sector is a net loser in the EA as a whole. HHs
in Belgium, Ireland, Malta and Germany incur the biggest per capita losses, while HHs in
Finland and Spain turn out to be net winners of inflation. Considerable heterogeneity exists
also within the HH sector: relatively young middle class HHs are net winners of inflation,
while older and richer HHs are losers. As a result, wealth inequality in the EA decreases with unexpected inflation, although in some countries (Austria, Germany and Malta) inequality increases due to presence of relatively few young borrowing HHs. We document that HHs inflation exposure varies systematically across countries, with HHs in high inflation EA countries holding systematically lower nominal exposures.
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 | Dieser Eintrag ist Teil der Universitätsbibliographie. |
 | Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt. |
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