Real-Time Estimates of Differences in Real Expenditure Growth and Inflation across Households

Masataka Mori and Juan Sanchez

Review, 2025, vol. 107, issue 18, 22 pages

Abstract: This article presents a framework to monitor differences in real expenditure growth and inflation in real time, focusing on variations across the expenditure distribution. High-frequency tracking of heterogeneity in real expenditure growth and inflation holds particular value for policymakers. The newly constructed time series reveals three key findings. First, households with lower expenditure levels have faced higher inflation since 2000 than those with higher expenditure levels, with significant disparities in the range of 0.57 and 1.23 percentage-point differences between 2005–2008 and 2011, respectively. Second, volatility in real expenditure growth is higher for lower-expenditure households than for higher-expenditure ones. Third, there was significant heterogeneity in the recovery of real expenditure in the two years following the outbreak of COVID-19.

Keywords: inflation; household expenditures (search for similar items in EconPapers)
JEL-codes: D12 D30 E21 E31 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedlrv:102149

DOI: 10.20955/r.2025.18

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