Monetary policy shocks and their effects across the wealth distribution
Evidence from new European data
Bibliographic Data
| ID | 12836643 |
|---|---|
| Authors | Simone Cima (Trinity College Dublin, corresponding author), Marco Moreno-Ibarra (0000-0002-0349-5585, Trinity College Dublin) |
| Year | 2025 |
| Publication date | 2025-08-05 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Journal of Economic Inequality (JOURNAL) |
| Journal identifiers | ISSN: 1569-1721 • E-ISSN: 1573-8701 |
| Publisher | Springer Science+Business Media (PUBLISHER • DE) |
| DOI | 10.1007/s10888-025-09687-4 |
| OpenAlex | W4412995552 |
| Language | EN |
| References cited | 49 |
We use new data on the distribution of wealth in the euro area and employ panel local projections to estimate the different impact of ECB monetary policy shocks on households across the wealth distribution. We look at how policy affects the value of their assets, the composition of their balance sheets, their investment decisions, and overall wealth inequality. We find that in response to a contractionary shock, poorer households display a substantial decline in their assets and in their overall net wealth. Conversely, the overall wealth of the very richest is not significantly affected. This different response leads to a moderate increase in overall wealth inequality. We further perform a decomposition of asset movements caused by the shock, isolating the effect of revaluations and of household investment. We observe that the response of household wealth due to a monetary policy shock occurs primarily through revaluation effects
Distribution (mathematics · Economics · Monetary economics · Monetary policy · Financial Literacy, Pension, Retirement Analysis · Housing Market and Economics · Monetary Policy and Economic Impact
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| Citation velocity | historical |
|---|---|
| Highly cited | No |