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Macroeconomic Performance and Inequality: Brazil 1983-94

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Author Info
M.F.Meyer Bittencourt

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Abstract

This paper examines how macroeconomic performance affected earnings inequality during the 1980’s and early 90’s in Brazil. The evidence shows that the chronic high inflation existent at the time had a clear and significant effect in raising inequality. The results based on panel time series data and analysis are robust for different concepts of inflation, inequality measures, estimators and specifications. The economic intuition suggests that high inflation rates combined with incomplete indexation coverage more than offset any progressive effect expectedly coming from the debtor and creditor channel. Hence, credible and stable macroeconomic policies, which keep inflation low and under control in the long run is to be a necessary first step of any public policy package implemented to tackle the high levels of inequality existent in Brazil.

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Publisher Info
Paper provided by Department of Economics, University of Bristol, UK in its series The Centre for Market and Public Organisation with number 05/114.

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Length: 18 pages
Date of creation: Jan 2005
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Handle: RePEc:bri:cmpowp:05/114

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Related research
Keywords: Inequality; inflation; indexation;

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Find related papers by JEL classification:
C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
D30 - Microeconomics - - Distribution - - - General
E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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