The effect of monetary policy on inflation heterogeneity along the income distribution

Miguel Ampudia, Michael Ehrmann and Georg Strasser

No 2858, Working Paper Series from European Central Bank

Abstract: This paper studies the effect of monetary policy on inflation along the income distributionin several euro area countries. It shows that monetary policy has differential effects and identifies twochannels which point in opposite directions. On the one hand, different consumption shares imply thatthe inflation experienced by high-income households responds less to monetary policy. On the otherhand, the paper provides novel evidence that there are substantial differences in shopping behaviourand its reaction to monetary policy, which imply that the inflation experienced by high-income householdsresponds more to monetary policy. JEL Classification: E31, E52, D30

Keywords: distributional effects; inflation; monetary policy; shopping behaviour; substitution (search for similar items in EconPapers)
Date: 2023-10
New Economics Papers: this item is included in nep-mon
Note: 2445760
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: The effect of monetary policy on inflation heterogeneity along the income distribution (2023)
Working Paper: The effect of monetary policy on inflation heterogeneity along the income distribution (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20232858

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