Beskæftigelse, Sociale Anliggender, Arbejdsmarkedsforhold og Inklusion

09/10/2023
The uneven impact of high inflation

The uneven impact of high inflation

Inflation indices such as national Consumer Price Indices (CPI) and the EU Harmonised Index of Consumer Prices (HICP) measure price changes for the overall economy, which may not reflect the inflation experience of an individual household or group of households. This paper contributes to previous studies of the distributive impact of recent high inflation in EU Member States. Using more recent and granular results, it finds a substantial rise in effective inflation dispersion across households and confirms that lower-income households continue to experience higher inflation. This inflation gap remains even after energy prices have eased and when controlling for other household characteristics. Results also show that the distributive impact of inflation on household groups has varied over time, with changes in relative prices influencing the extent of the impact of inflation across population groups. Finally, differences in effective inflation rates have cumulated, particularly for households with lower incomes, those headed by people aged 60 years or more, and those with lower levels of education.  

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