Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/300078 
Authors: 
Year of Publication: 
2024
Series/Report no.: 
BoF Economics Review No. 6/2024
Publisher: 
Bank of Finland, Helsinki
Abstract: 
This study aims to explore the extent to which changes in wealth contributes to inflation utilizing a highly flexible non-Gaussian SVAR framework which minimizes the risk of distributional misspecification. We employ narrative sign restrictions to label the asset price shock and leverage the property of the Bayesian approach to compute the posterior probability of each shock satisfying these proposed restrictions. The structural shock associated with wealth has a positive impact on private consumption and GDP. The asset price shock is also positively related on consumer prices. Therefore, variations in wealth appear to stimulate the real economy.
Subjects: 
Asset price shocks
wealth effect
inflation
structural vector autoregression
non-Gaussianity
JEL: 
E31
E44
Persistent Identifier of the first edition: 
Document Type: 
Research Report

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