Navigating the well-being effects of monetary policy:Evidence from the European Central Bank

Mehdi El Herradi () and Aurelien Leroy
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Aurelien Leroy: UB - Université de Bordeaux, BSE - Bordeaux Sciences Economiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper assesses whether monetary policy announcements have an impact on households' (subjective) well-being by analysing life satisfaction on the days before and after monetary surprises in Germany. To do so, we use individual-level information on life satisfaction from the German Socio-Economic Panel (SOEP) survey and identify the day on which each answer is submitted to the survey. We also exploit the Euro Area Monetary Policy event study Database (EA-MPD) to obtain daily-level information on European Central Bank (ECB) monetary surprises. Our results show that life satisfaction is significantly affected by monetary policy surprises: tightening surprises decrease life satisfaction, while easing surprises increase it.

Keywords: Monetary policy; Subjective Well-Being; Survey data; European Central Bank (search for similar items in EconPapers)
Date: 2022-12-14
New Economics Papers: this item is included in nep-ban, nep-eec, nep-hap and nep-mon
Note: View the original document on HAL open archive server: https://hal.science/hal-03897994
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Working Paper: Navigating the well-being effects of monetary policy: Evidence from the European Central Bank (2022)
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