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The impact of the recent inflation surge across households

Author

Listed:
  • Bobasu, Alina
  • Di Nino, Virginia
  • Osbat, Chiara

Abstract

This article presents evidence on the distributional effects of the recent surge in inflation on households. Households experience inflation differently depending on their spending allocation. When the prices of essential goods rise, low-income households are particularly affected. Households also have different exposures to inflationary shocks depending on the income they allocate to consumption, their income risk and the composition of their wealth. In the current inflationary episode, the resilience of the labour market and the provision of fiscal support have so far tempered some of the adverse distributional consequences of high inflation on social welfare. JEL Classification: E01, E21, E31, E64, F41

Suggested Citation

  • Bobasu, Alina & Di Nino, Virginia & Osbat, Chiara, 2023. "The impact of the recent inflation surge across households," Economic Bulletin Articles, European Central Bank, vol. 3.
    • Handle: RePEc:ecb:ecbart:2023:0003:2
    Note: 261931
    as

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    File URL: https://www.ecb.europa.eu//pub/economic-bulletin/articles/2023/html/ecb.ebart202303_02~037515ed7d.en.html
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    Citations

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    Cited by:

    1. Ampudia, Miguel & Ehrmann, Michael & Strasser, Georg, 2023. "The effect of monetary policy on inflation heterogeneity along the income distribution," Working Paper Series 2858, European Central Bank.
    2. Stefano Neri, 2024. "There has been an awakening. The rise (and fall) of inflation in the euro area," Questioni di Economia e Finanza (Occasional Papers) 834, Bank of Italy, Economic Research and International Relations Area.

    More about this item

    Keywords

    inequality; Inflation; terms of trade;
    All these keywords.

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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