Effects of the ECB's Unconventional Monetary Policy on Real and Financial Wealth

Feldkircher, Martin and Poyntner, Philipp and Schuberth, Helene (2019) Effects of the ECB's Unconventional Monetary Policy on Real and Financial Wealth. Department of Economics Working Paper Series, 286. WU Vienna University of Economics and Business, Vienna.

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Abstract

We assess the impact of the ECB's unconventional monetary policy (UMP) on the wealth distribution of households in ten euro area countries. For this purpose, we estimate the effects of an ECB balance sheet expansion on financial asset and housing prices by means of vector autoregressions. We then use the estimates to carry out micro simulations based on data from the Household Finance and Consumption Survey (HFCS). We find that the overall effect of UMP on the net wealth distribution of households differs depending on which wealth inequality indicators we use. There is an inequality-increasing effect for the majority of the countries under review when we use wealth inequality indicators that are sensitive to changes at the tails of the wealth distribution. The effect is more equalizing when we base our assessment on the Gini coefficient. It is also important to note that one-third of the households in our sample does not hold financial or housing wealth and is thus not directly affected by UMP measures via the asset price channel.

Item Type: Paper
Keywords: Monetary Policy, Inequality, Wealth, Quantitative Easing
Classification Codes: JEL D14, D31, E44, E52, E58
Divisions: Departments > Volkswirtschaft
Depositing User: Claudia Tering-Raunig
Date Deposited: 08 Jul 2019 12:23
Last Modified: 22 Oct 2019 00:41
FIDES Link: https://bach.wu.ac.at/d/research/results/91500/
URI: https://epub.wu.ac.at/id/eprint/7040

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