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Inflation and Income Distribution: Further Evidenceon Empirical Links
Author: Mr. Ales Bulir and Ms. Anne Marie Gulde
Series:
IMF Working Papers
Volume/Issue:
Volume 1995: Issue 086
Language:
English
Publication Date:
01 Aug 1995
DOI:
https://0-doi-org.library.svsu.edu/10.5089/9781451850826.001
ISBN:
9781451850826
ISSN:
1018-5941
Pages:
30
Keywords:
WP; income; Gini coefficient; income share; inflation variability; inflation uncertainty; income change; distribution-inflation link; income quintile; sectoral income; inflation data; family income; quintiles in the United States; income distribution-inflation link; equivalized income; Income distribution; Inflation; Personal income; Consumer price indexes; Purchasing power parity
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper examines the effects of inflation and associated financial instability on income distribution. Using both pooled cross country and single country time series models, the level of inflation, inflation variability, and the variability of the nominal exchange rate are shown to impact negatively on overall income equality. Looking at disaggregate measures of income distribution, the issue as to whether inflation is a progressive or regressive tax is found to be negatively correlated with the level of development and the sophistication of the financial structure. The paper argues that these results point towards financial variables as a partial way of rectifying the generally poor explanatory power of both cross-country and time series models of income distribution.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund