Inflation and the Redistribution of Nominal Wealth
This study quantitatively assesses the effects of inflation through changes in the value of nominal assets. It documents nominal asset positions in the United States across sectors and groups of households and estimates the wealth redistribution caused by a moderate inflation episode. The main losers from inflation are rich, old households, the major bondholders in the economy. The main winners are young, middle-class households with fixed-rate mortgage debt. Besides transferring resources from the old to the young, inflation is a boon for the government and a tax on foreigners. Lately, the amount of U.S. nominal assets held by foreigners has grown dramatically, increasing the potential for a large inflation-induced wealth transfer from foreigners to domestic households.
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- Matthias Doepke & Martin Schneider, 2006.
"Aggregate Implications of Wealth Redistribution: The Case of Inflation,"
Journal of the European Economic Association,
MIT Press, vol. 4(2-3), pages 493-502, 04-05.
- Doepke, Matthias & Schneider, Martin, 2006. "Aggregate Implications of Wealth Redistribution: The Case of Inflation," CEPR Discussion Papers 5552, C.E.P.R. Discussion Papers.
- Matthias Doepke & Martin Schneider, 2006. "Aggregate Implications of Wealth Redistribution: The Case of Inflation," UCLA Economics Working Papers 846, UCLA Department of Economics.
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