The interest rate exposure of euro area households

We estimate the “unhedged interest rate exposure” (URE) of euro area households. The URE, defined by Auclert (2019), is a welfare metric that captures extent to which households are exposed changes in real rates, and allows an assessment redistributive effects associated with monetary policy decisions. examine distribution UREs along net wealth, income, age housing status distributions for as whole individual countries, document substantial heterogeneity across these dimensions. Households at lower end wealth distribution, younger mortgagors have negative exposure would lose out from increase all else being equal. Wealthy households, higher income older well outright homeowners stand benefit. exposures countries largely attributable differences prevalence adjustable mortgages (ARMs). Averaging Austria, Germany, Italy Malta benefit rate, whereas Cyprus, Ireland, Netherlands, Portugal Spain out.