IMF Working Papers

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

By Michael Sarel

November 1, 1997

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Michael Sarel. How Macroeconomic Factors Affect Income Distribution: The Cross-Country Evidence, (USA: International Monetary Fund, 1997) accessed November 8, 2024
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.

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

Keywords: After-tax wage income, Chg Gini coefficient, Gini coefficient, Growth rate, Inc net, Income, Income distribution, Income distribution issue, Income distribution variable, Income inequality, Income level, Inflation, Inflation stabilization program, In-kind income, Interest income, Macroeconomic factors, Net, Net effect, Ols regression, Personal income, Rate of change, Real exchange rates, WP

Publication Details

  • Pages:

    25

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 1997/152

  • Stock No:

    WPIEA1521997

  • ISBN:

    9781451922714

  • ISSN:

    1018-5941

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