Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/308805 
Year of Publication: 
2024
Series/Report no.: 
CFS Working Paper Series No. 728
Publisher: 
Goethe University Frankfurt, Center for Financial Studies (CFS), Frankfurt a. M.
Abstract: 
We study households' response to the redistributive effects of inflation combining bank data with an information experiment during historic inflation. Households are generally well-informed about inflation and concerned about its wealth impact; yet, while knowledge about inflation eroding nominal assets is widespread, most households are unaware of nominal-debt erosion. When informed about the latter, households view nominal debt more positively and increase estimates of their real net wealth. These changes causally affect actual consumption and hypothetical debt decisions. Our findings suggest 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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