New article in the ECB Research Bulletin: “The unequal impact of the 2021-22 inflation surge on euro area households”

(...)  the latest issue (No. 116) of the ECB Research Bulletin, entitled “The unequal impact of the 2021-22 inflation surge on euro area households”

Filippo Pallotti (University College London), Gonzalo Paz Pardo, Jiri Slacalek, Oreste Tristani (all Directorate General Research, European Central Bank) and Giovanni L. Violante (Princeton University) analyse the 2021-22 inflation surge in the euro area, finding large average welfare losses, especially compared with commonly estimated costs of a typical recession, and substantial differences across countries. 

Within countries, there are differences across age groups, but not across income groups. 

While this wide variation posed a challenge for monetary policy, they find that unconventional fiscal policy measures helped to substantially compress these inflation differentials across households. (...)