Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/297344 
Year of Publication: 
2024
Series/Report no.: 
ECB Working Paper No. 2904
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
We study the redistributive effects of surprise inflation combining administrative bank data with an information provision experiment during an episode of historic inflation. On average, households are well-informed about prevailing inflation and are concerned about its impact on their wealth; yet, while many households know about inflation eroding nominal assets, most are unaware of nominal-debt erosion. Once they receive information on the debt-erosion channel, households view nominal debt more positively and increase estimates of their own real net wealth. These changes causally affect actual consumption and hypothetical debt decisions. Our findings suggest that real wealth mediates the sensitivity of consumption to inflation once households are aware of the wealth effects of inflation.
Subjects: 
Inflation Beliefs
Information Treatment
Consumption
Monetary Policy
JEL: 
D12
D14
D83
D84
E21
E31
E52
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-6384-8
Document Type: 
Working Paper

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