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Effects of the ECB’s Unconventional Monetary Policy on Real and Financial Wealth

Clara De Luigi (), Martin Feldkircher, Philipp Poyntner () and Helene Schuberth ()
Additional contact information
Clara De Luigi: Foreign Research Division, Oesterreichische Nationalbank
Philipp Poyntner: Department of Economics, Vienna University of Economics and Business
Helene Schuberth: Foreign Research Division, Oesterreichische Nationalbank

Department of Economics Working Papers from Vienna University of Economics and Business, Department of Economics

Abstract: We assess the impact of the ECB’s unconventional monetary policy (UMP) on the wealth distribution of households in ten euro area countries. For this purpose, we estimate the effects of an ECB balance sheet expansion on financial asset and housing prices by means of vector autoregressions. We then use the estimates to carry out micro simulations based on data from the Household Finance and Consumption Survey (HFCS). We find that the overall effect of UMP on the net wealth distribution of households differs depending on which wealth inequality indicators we use. There is an inequality-increasing effect for the majority of the countries under review when we use wealth inequality indicators that are sensitive to changes at the tails of the wealth distribution. The effect is more equalizing when we base our assessment on the Gini coefficient. It is also important to note that one-third of the households in our sample does not hold financial or housing wealth and is thus not directly affected by UMP measures via the asset price channel.

Keywords: Monetary Policy; Inequality; Wealth; Quantitative Easing (search for similar items in EconPapers)
JEL-codes: D14 D31 E44 E52 E58 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mac and nep-mon
Date: 2019-07
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