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Can inflation be a good thing for the poor? Evidence from Ethiopia

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  • Elisa Ticci

Abstract

In 2006–08, Ethiopia experienced high food and non-food inflation. This study shows that the recent inflationary spell is likely to have significantly worsened poverty in urban areas, given the reliance on the market for most consumption needs. In rural areas the distributive impact of inflation is less easy to measure. In Ethiopia's rural areas, many households are net food buyers, and non-food items weigh significantly in their budgets. Thus, it seems unlikely that high inflation was beneficial for poverty reduction, a position which seemed to underpin much of the policy response to the crisis.

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  • Elisa Ticci, 2011. "Can inflation be a good thing for the poor? Evidence from Ethiopia," Development in Practice, Taylor & Francis Journals, vol. 21(4-5), pages 629-641, June.
    • Handle: RePEc:taf:cdipxx:v:21:y:2011:i:4-5:p:629-641
    DOI: 10.1080/09614524.2011.562877
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    Cited by:

    1. Léonce Ndikumana & Janvier D. Nkurunziza & Miguel Eduardo Sánchez Martín & Samuel Mulugeta & Zerihun Getachew Kelbore, 2023. "Monetary, fiscal, and structural drivers of inflation in Ethiopia: new empirical evidence from time series analysis," Review of Development Economics, Wiley Blackwell, vol. 27(2), pages 924-962, May.

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