Households' response to the wealth effects of inflation
Philip Schnorpfeil,
Michael Weber and
Andreas Hackethal
No 18440, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Abstract:
We study the redistributive effects of inflation combining administrative bank data with an information provision experiment during an episode of historic inflation. On average, households are well-informed about prevailing inflation and are concerned about its impact on their wealth; yet, while many households know about inflation eroding nominal assets, most are unaware of nominal-debt erosion. Once they receive information on the debt-erosion channel, households update upwards their beliefs about nominal debt and their own real net wealth. These changes in beliefs causally affect actual consumption and hypothetical debt decisions. Our findings suggest that real wealth mediates the sensitivity of consumption to inflation once households are aware of the wealth effects of inflation.
Keywords: Consumption (search for similar items in EconPapers)
JEL-codes: D12 D14 D83 D84 E21 E31 E52 (search for similar items in EconPapers)
Date: 2023-09
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Related works:
Working Paper: Households' response to the wealth effects of inflation (2024) 
Working Paper: Households' Response to the Wealth Effects of Inflation (2024) 
Working Paper: Households’ Response to the Wealth Effects of Inflation (2023) 
Working Paper: Households' Response to the Wealth Effects of Inflation (2023) 
Working Paper: Households' response to the wealth effects of inflation (2023) 
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