Price Level Changes and the Redistribution of Nominal Wealth Across

We document the presence of sizable distributional e¤ects from unexpected price level movements in the Euro Area (EA) using sectoral accounts and newly available data from the Household Finance and Consumption Survey. The EA as a whole is a net winner of unexpected price level increases, with Italy, Greece, Portugal and Spain being the biggest bene…ciaries, and Belgium and Malta being the largest losers. Governments are net winners of in‡ation, while the household (HH) sector is a net loser in the EA as a whole. HHs in Belgium, Ireland, Malta and Germany incur the biggest per capita losses, while HHs in Finland and Spain turn out to be net winners of in‡ation. Considerable heterogeneity exists also within the HH sector: relatively young middle class HHs are net winners of in‡ation, while older and richer HHs are losers. As a result, wealth inequality in the EA decreases with unexpected in‡ation, although in some countries (Austria, Germany and Malta) inequality increases due to presence of relatively few young borrowing HHs. We document that HHs in‡ation exposure varies systematically across countries, with HHs in high in‡ation EA countries holding systematically lower nominal exposures. JEL-Class. No.: E31,D31,D14