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The Heterogeneous Impact of Inflation Across the Joint Distribution of Household Income and Wealth

Author

Listed:
  • Luigi Infante

    (Directorate General for Economics, Statistics and Research)

  • David Loschiavo

    (Directorate General for Economics, Statistics and Research)

  • Andrea Neri

    (Directorate General for Economics, Statistics and Research)

  • Matteo Spuri

    (Directorate General for Economics, Statistics and Research)

  • Francesco Vercelli

    (Directorate General for Economics, Statistics and Research)

Abstract

We use the Distributional Wealth Accounts experimental statistics and preliminary survey data from the 2022 wave of the Survey on Household Income and Wealth, currently under collection, to assess the impact of the 2022 inflationary shock on financial wealth along the joint distribution of Italian household income and wealth. The analysis was carried out by dividing households into four groups based on their position relative to the median income and wealth values. In 2022 household net wealth at constant prices decreased by 11.4%, with small differences between the bottom and the top half of its distribution. The erosion of net financial wealth due to inflation amounted to slightly above one-tenth of annual disposable income for households in the upper part of the net wealth distribution. High-income households with low net wealth gained from inflation (9% of income) since they benefitted from the relatively larger erosion of the real value of their financial liabilities.

Suggested Citation

  • Luigi Infante & David Loschiavo & Andrea Neri & Matteo Spuri & Francesco Vercelli, 2025. "The Heterogeneous Impact of Inflation Across the Joint Distribution of Household Income and Wealth," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 11(2), pages 703-724, July.
    • Handle: RePEc:spr:italej:v:11:y:2025:i:2:d:10.1007_s40797-024-00294-2
    DOI: 10.1007/s40797-024-00294-2
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    References listed on IDEAS

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    1. Greg Kaplan & Giovanni L. Violante & Justin Weidner, 2014. "The Wealthy Hand-to-Mouth," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 45(1 (Spring), pages 77-153.
    2. Greg Kaplan & Giovanni L. Violante & Justin Weidner, 2014. "The Wealthy Hand-to-Mouth," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 48(1 (Spring), pages 77-153.
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    More about this item

    Keywords

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    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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