Distributional consequences of asset price inflation in the Euro Area

Klaus Adam and Panagiota Tzamourani

European Economic Review, 2016, vol. 89, issue C, 172-192

Abstract: We study the distributional consequences of housing price, bond price and equity price increases for Euro Area households using data from the Household Finance and Consumption Survey (HFCS). The capital gains from bond price and equity price increases turn out to be concentrated among relatively few households, while the median household strongly benefits from housing price increases. The capital gains from bond price increases (relative to household net wealth) do not correlate with household net wealth (or income). Bond price increases thus leave net wealth inequality largely unchanged. In contrast, equity price increases largely benefit the top end of the net wealth (and income) distribution, thus amplify net wealth inequality. Housing price increases display a hump shaped pattern over the net wealth distribution, with the poorest and richest households benefitting least, but there exists considerable heterogeneity across Euro Area countries. The ECB's OMT announcements over the summer of 2012 had quantitatively similar distributional implications as an unexpected loosening of the policy rate by about 175 basis points.

Keywords: Asset price inflation; Wealth redistribution (search for similar items in EconPapers)
JEL-codes: D31 E21 E52 E58 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (83)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0014292116301234
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Distributional Consequences of Asset Price Inflation in the Euro Area (2015)
Working Paper: Distributional consequences of asset price inflation in the Euro area (2015)
Working Paper: Distributional consequences of asset price inflation in the euro area (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:89:y:2016:i:c:p:172-192

DOI: 10.1016/j.euroecorev.2016.07.005

Access Statistics for this article

European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer

More articles in European Economic Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().