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Macroeconomic Performance and Inequality: Brazil 1983-94

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  • M.F.Meyer Bittencourt

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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Bibliographic 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
Date of revision:
Handle: RePEc:bri:cmpowp:05/114

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Keywords: Inequality; inflation; indexation;

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Citations

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Cited by:
  1. Manoel Bittencourt, 2010. "Democracy, Populism and Hyperinflation(s): Some Evidence from Latin America," Working Papers 169, Economic Research Southern Africa.
  2. Bittencourt, Manoel, 2012. "Inflation and economic growth in Latin America: Some panel time-series evidence," Economic Modelling, Elsevier, vol. 29(2), pages 333-340.
  3. Azevedo, Joao Pedro & David, Antonio C. & Bastos, Fabiano Rodrigues & Pineda, Emilio, 2014. "Fiscal adjustment and income inequality : sub-national evidence from Brazil," Policy Research Working Paper Series 6945, The World Bank.
  4. Manoel F. Meyer Bittencourt, 2006. "Financial Development and Inequality: Brazil 1985-99," Bristol Economics Discussion Papers 06/582, Department of Economics, University of Bristol, UK.
  5. Bittencourt, Manoel, 2010. "Democracy, Populism and Hyperinflation[s]: Evidence from Latin America," Proceedings of the German Development Economics Conference, Hannover 2010 47, Verein für Socialpolitik, Research Committee Development Economics.
  6. Manoel Bittencourt, 2009. "Polarisation, Populism and Hyperinflation[s]: Some Evidence from Latin America," Working Papers 200921, University of Pretoria, Department of Economics.
  7. Bittencourt, Manoel, 2011. "Inflation and financial development: Evidence from Brazil," Economic Modelling, Elsevier, vol. 28(1-2), pages 91-99, January.
  8. Manoel Bittencourt, 2013. "Economic Growth and Inequality: Evidence from the Young Democracies of South America," Working Papers 361, Economic Research Southern Africa.

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