## Distributional Impacts of Inflation Accounting for Behavioral Effects and Real Assets

_IMF Working Papers, February 6, 2026_

## Source details

**Canonical URL:** [Distributional Impacts of Inflation Accounting for Behavioral Effects and Real Assets](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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## Bibliographic details
- 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

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### Scope and objective
- 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:
  - Incorporating real assets into the wealth channel.
  - Accounting for behavioral responses to inflation in both the income and wealth channels.

### Methodology (as described)
- 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.

### Key findings and quantitative results
- 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 and keywords (as listed)
- 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

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_Source: https://www.imf.org/en/publications/wp/issues/2026/02/06/distributional-impacts-of-inflation-accounting-for-behavioral-effects-and-real-assets-573722_