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Relative price shocks and inequality: evidence from Italy

Author

Listed:
  • Leonardo Ciambezi

    (CNRS GREDEG, Université Côte d'Azur, Nice; Institute of Economics and l'Embeds, Scuola Superiore Sant'Anna, Pisa)

  • Alessandro Pietropaoli

    (Bank of Italy; CNRS GREDEG, Université Côte d'Azur, Nice)

Abstract

Is inflation equal for all? Combining Italian Household Budget Survey (HBS) and Harmonised Index of Consumer Prices (HICP) data, we investigate the heterogeneity of Italian households' inflation experiences over the period 2015-23, depending on their standards of living and other observable characteristics. Following several years of distributional inflation neutrality, we find that the price surge that began in mid-2021 especially increased the cost of living for poorer households and more vulnerable socio-demographic groups, thus contributing to increasing overall inequality. After peaking in the second half of 2022, the aggregate inflation rate declined sharply in 2023, as did the differential exposure of Italian households.

Suggested Citation

  • Leonardo Ciambezi & Alessandro Pietropaoli, 2024. "Relative price shocks and inequality: evidence from Italy," Questioni di Economia e Finanza (Occasional Papers) 883, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_883_24
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    References listed on IDEAS

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    More about this item

    Keywords

    household-specific price indices; energy price shocks; inflation inequality; Italy;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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