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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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File URL: http://www.bris.ac.uk/Depts/CMPO/workingpapers/wp114.pdf
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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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  1. Cysne, Rubens P. & Maldonado, Wilfredo L. & Monteiro, Paulo Klinger, 2005. "Inflation and income inequality: A shopping-time approach," Journal of Development Economics, Elsevier, vol. 78(2), pages 516-528, December.
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  18. Eliana Cardoso & Andre Urani & Andre Urani, 1995. "Inflation and Unemployment as Determinants of Inequality in Brazil: The 1980s," NBER Chapters, in: Reform, Recovery, and Growth: Latin America and the Middle East, pages 151-176 National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Manoel Bittencourt, 2013. "Economic Growth and Inequality: Evidence from the Young Democracies of South America," Working Papers 201301, University of Pretoria, Department of Economics.
  2. Manoel Bittencourt, 2010. "Democracy, Populism and Hyperinflation(s): Some Evidence from Latin America," Working Papers 169, Economic Research Southern Africa.
  3. Meyer Bittencourt, Manoel F., 2006. "Financial Development and Inequality: Brazil 1985-99," Proceedings of the German Development Economics Conference, Berlin 2006 5, Verein für Socialpolitik, Research Committee Development Economics.
  4. Bittencourt, Manoel, 2012. "Inflation and economic growth in Latin America: Some panel time-series evidence," Economic Modelling, Elsevier, vol. 29(2), pages 333-340.
  5. Bittencourt, Manoel, 2011. "Inflation and financial development: Evidence from Brazil," Economic Modelling, Elsevier, vol. 28(1), pages 91-99.
  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, 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.

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