The heterogeneous impact of inflation across the joint distribution of household income and wealth

Luigi Infante, David Loschiavo, Andrea Neri, Matteo Spuri () and Francesco Vercelli ()
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Matteo Spuri: Bank of Italy
Francesco Vercelli: Bank of Italy

No 817, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: This paper assesses the impact of the 2022 inflationary shock on Italian households’ wealth along the joint distribution of income and net wealth. The analysis was carried out by dividing households into four groups based on their median income and net wealth, using a methodology similar to the Distributional Wealth Accounts developed at European level. The erosion of the real value of net financial wealth due to inflation was heterogeneous across households. While capital losses were small for the least wealthy households, for the wealthiest group they exceeded one tenth of annual disposable income. Conversely, the reduction in the real value of financial liabilities allowed the group of households with high income and low net wealth to realize a capital gain of nearly one tenth of their income.

Keywords: distributional wealth accounts; inflation; joint income and wealth distribution (search for similar items in EconPapers)
JEL-codes: D14 D31 D51 E31 (search for similar items in EconPapers)
Date: 2023-11
New Economics Papers: this item is included in nep-eec, nep-eur and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_817_23

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