Template-Type: ReDIF-Paper 1.0
Author-Name: Mayorga Clodomiro Ferreira
Author-Name-First: Mayorga Clodomiro
Author-Name-Last: Ferreira
Author-Name: Miguel Cardoso
Author-Name-First: Miguel
Author-Name-Last: Cardoso
Author-Name: José Miguel Leiva
Author-Name-First: José Miguel
Author-Name-Last: Leiva
Author-Name: Alvaro Ortiz
Author-Name-First: Alvaro
Author-Name-Last: Ortiz
Title: The Heterogeneous Impact of Inflation on Households' Balance Sheets
Abstract: We identify and study three key channels that shape how inflation affects wealth inequality: (i) the traditional Fisher channel through which inflation redistributes from lenders to borrowers; (ii) a nominal labour income channel through which inflation reduces the real value of sticky wages and benefits; and (iii) a relative consumption channel through which heterogeneous increases in the price of different goods affect people differently depending on their consumption baskets. We then quantify these channels for Spain in 2021 using both public surveys and a novel proprietary bank dataset that includes detailed information on clients’ assets and liabilities, credit and debit card payments, bills and labour related income. Results show that the Fisher and labour income channels are one order of magnitude larger than relative consumption. Middle-aged individuals were roughly unaffected by inflation while older ones suffered the most its consequences.
Length:  21 pages
Creation-Date:  2022-11
File-URL: https://aaep.org.ar/works/works2022/4563.pdf
File-Format: Application/pdf
Number: 4563
Classification-JEL: E31, E21, D31
Handle: RePEc:aep:anales:4563