Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/276257 
Year of Publication: 
2023
Series/Report no.: 
SAFE Working Paper No. 400
Publisher: 
Leibniz Institute for Financial Research SAFE, Frankfurt a. M.
Abstract: 
We study the redistributive effects of 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 update upwards their beliefs about nominal debt and their own real net wealth. These changes in beliefs 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
Document Type: 
Working Paper

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