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Does inequality cause inflation?: The political economy of inflation, taxation and government debt

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  • Beetsma, R.M.W.J.
  • Ploeg, F. van der

    (Tilburg University, Center for Economic Research)

Abstract

A democratic society in which the distribution of wealth is unequal elects political parties that are likely to represent the interests of poor people. It is in the interests of the clientele of the resulting governments to attempt to levy inflation taxes in order to erode the real value of debt service and redistribute from the rich to the poor. Consequently, inequality and high levels of nominal government debt sow the seeds for inflation. Some cross-country evidence for this proposition is provided. Copyright 1996 by Kluwer Academic Publishers

(This abstract was borrowed from another version of this item.)

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Bibliographic Info

Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 1992-30.

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Date of creation: 1992
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Handle: RePEc:dgr:kubcen:199230

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Web page: http://center.uvt.nl

Related research

Keywords: Inflation; Income Distribution;

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