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Income Inequality: Does Inflation Matter?

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  • By Ales BulÌr

    (International Monetary Fund)

Abstract

This paper contributes to the income inequality literature that is based on the traditional Kuznets model. Level of development, state employment, fiscal redistribution, and price stability are found to improve income inequality in a given country. The positive impact of price stability on income distribution is nonlinear. The reduction in inflation from hyperinflationary levels significantly lowers income inequality, while further reduction toward a very low level of inflation seems to bring about negligible additional gains in the Gini coefficient. Copyright 2001, International Monetary Fund

Suggested Citation

  • By Ales BulÌr, 2001. "Income Inequality: Does Inflation Matter?," IMF Staff Papers, Palgrave Macmillan, vol. 48(1), pages 1-5.
    • Handle: RePEc:pal:imfstp:v:48:y:2001:i:1:p:5
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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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