{
  "title": "Distributional Impacts of Inflation Accounting for Behavioral Effects and Real Assets",
  "publication": "IMF Working Papers, February 6, 2026",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2026/02/06/distributional-impacts-of-inflation-accounting-for-behavioral-effects-and-real-assets-573722",
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  "summary": "This paper analyzes the redistributive effects of inflation across 18 European economies from 2021:Q3 to 2022:Q2, using unique micro-datasets for this country sample. We estimate inflation’s impact on household welfare through the consumption basket, income, and wealth channels.",
  "sections": [
    {
      "heading": "Scope and objective",
      "content": "- Analyzes redistributive effects of inflation across 18 European economies from 2021:Q3 to 2022:Q2 using unique micro-datasets for this country sample.\n- Estimates inflation’s impact on household welfare through three channels: the consumption basket, income, and wealth channels.\n- Main methodological contributions:\n  - Incorporating real assets into the wealth channel.\n  - Accounting for behavioral responses to inflation in both the income and wealth channels."
    },
    {
      "heading": "Methodology (as described)",
      "content": "- Uses micro-datasets covering households in 18 European economies for the period 2021:Q3 to 2022:Q2.\n- Evaluates welfare effects via consumption, income, and wealth channels.\n- Explicitly integrates real assets (including housing) into the wealth channel.\n- Explicitly models behavioral responses to inflation in the income and wealth channels."
    },
    {
      "heading": "Key findings and quantitative results",
      "content": "- The inflation shock is estimated to have caused an average welfare loss equivalent to 18.5 percent of annual household income across the sample.\n- Households in the poorest income quintiles suffered the largest welfare losses.\n- Incorporating real assets significantly alters estimated distributional effects compared to previous literature.\n- Cross-country differences widen when real assets are incorporated.\n- In a few economies, some or all quintiles show welfare gains because house prices rose faster than inflation."
    },
    {
      "heading": "Subjects and keywords (as listed)",
      "content": "- Subjects: Consumption, Disposable income, Housing prices, Income, Inflation, National accounts, Prices\n- Keywords: Behavioral Effects, Consumption, Disposable income, Distribution, household income, Housing prices, IMF working papers, Income, income channel, Inflation, inflation composition, inflation shock, Real Assets, Wealth Effects\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2026/02/06/distributional-impacts-of-inflation-accounting-for-behavioral-effects-and-real-assets-573722"
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    "Authors: Kardelen Cicek, Julieth C Pico-Mejia, Marcos Poplawski Ribeiro, Alberto Tumino",
    "Published: February 6, 2026",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798229038430.001",
    "Analyzes redistributive effects of inflation across 18 European economies from 2021:Q3 to 2022:Q2 using unique micro-datasets for this country sample.",
    "Estimates inflation’s impact on household welfare through three channels: the consumption basket, income, and wealth channels.",
    "Main methodological contributions:",
    "Uses micro-datasets covering households in 18 European economies for the period 2021:Q3 to 2022:Q2.",
    "Evaluates welfare effects via consumption, income, and wealth channels.",
    "Explicitly integrates real assets (including housing) into the wealth channel.",
    "Explicitly models behavioral responses to inflation in the income and wealth channels.",
    "The inflation shock is estimated to have caused an average welfare loss equivalent to 18.5 percent of annual household income across the sample.",
    "Households in the poorest income quintiles suffered the largest welfare losses.",
    "Incorporating real assets significantly alters estimated distributional effects compared to previous literature.",
    "Cross-country differences widen when real assets are incorporated.",
    "In a few economies, some or all quintiles show welfare gains because house prices rose faster than inflation.",
    "Subjects: Consumption, Disposable income, Housing prices, Income, Inflation, National accounts, Prices",
    "Keywords: Behavioral Effects, Consumption, Disposable income, Distribution, household income, Housing prices, IMF working papers, Income, income channel, Inflation, inflation composition, inflation shock, Real Assets, Wealth Effects",
    "**Working Paper**"
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