Inflation and Income Distribution : Further Evidenceon Empirical Links

Author/Editor:

Ales Bulir ; Anne Marie Gulde

Publication Date:

August 1, 1995

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 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.

Series:

Working Paper No. 95/86

Subject:

English

Publication Date:

August 1, 1995

ISBN/ISSN:

9781451850826/1018-5941

Stock No:

WPIEA0861995

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

30

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