Household Wealth and Resilience to Financial Shocks in Italy

Daniel Garcia-Macia

International Journal of Central Banking, 2021, vol. 17, issue 3, 241-272

Abstract: Financial shocks in a sector of the economy transmit to other sectors via financial linkages. This paper constructs the matrix of bilateral financial sectoral exposures in Italy over the last two decades. Using this information, it develops a method to simulate how each sector absorbs plausible financial shocks. A fall in the value of government bonds directly affects banks and indirectly affects households via equity holdings in banks. A bank bail-in is absorbed by foreigners and by households, particularly those at the top of the wealth distribution. Conversely, in a bank bailout these two groups benefit from a government transfer.

JEL-codes: G11 G32 G33 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Household Wealth and Resilience to Financial Shocks in Italy (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ijc:ijcjou:y:2021:q:3:a:6

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