How Macroeconomic Factors Affect Income Distribution: The Cross-Country Evidence

Author/Editor:

Michael Sarel

Publication Date:

November 1, 1997

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This study develops a cross-section empirical framework to examine the relationship between the macroeconomic environment and trends in income distribution. The macroeconomic variables that are found to be associated with an improvement in income distribution are higher growth rate, higher income level, higher investment rate, real depreciation (especially for low-income countries), and improvement in terms of trade. The estimated significant effects of growth, income, and investment provide evidence that policies designed to promote investment and growth are likely also to contribute to an improvement in income distribution.

Series:

Working Paper No. 1997/152

Subject:

Foreign exchange Income distribution Income inequality Inflation National accounts Personal income Prices Real exchange rates

English

Publication Date:

November 1, 1997

ISBN/ISSN:

9781451922714/1018-5941

Stock No:

WPIEA1521997

Pages:

25

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