Inequality, inflation, and central bank independence
Abstract
What can account for the different contemporaneous inflation experiences of various countries, and of the same country over time? We present an analysis of the determination of inflation from a political economy perspective. We document a positive correlation between income inequality and inflation and then present a theory of the determination of inflation outcomes in democratic societies that illustrates how greater inequality leads to greater inflation, owing to a desire by voters for wealth redistribution. We conclude by showing that democracies with more independent central banks tend to have better inflation outcomes for a given degree of inequality.(This abstract was borrowed from another version of this item.)
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Paper provided by Federal Reserve Bank of Dallas in its series Working Papers with number 97-05.Length:
Date of creation: 1997
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Handle: RePEc:fip:feddwp:97-05
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Keywords: Banks and banking; Central ; Inflation (Finance);Other versions of this item:
- Jim Dolmas & Gregory W. Huffman & Mark A. Wynne, 2000. "Inequality, inflation, and central bank independence," Canadian Journal of Economics, Canadian Economics Association, vol. 33(1), pages 271-287, February.
- E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
- H0 - Public Economics - - General
References
References listed on IDEASPlease report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Hoover, Gary A. & Giedeman, Daniel C. & Dibooglu, Sel, 2009. "Income inequality and the business cycle: A threshold cointegration approach," Economic Systems, Elsevier, vol. 33(3), pages 278-292, September.
- Marta Areosa & Waldyr Areosa, 2006. "The Inequality Channel of Monetary Transmission," Working Papers Series 114, Central Bank of Brazil, Research Department.
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"Inflation and inequality,"
Journal of Monetary Economics,
Elsevier, vol. 54(4), pages 1088-1114, May.
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- Albanesi, Stefania, 2002. "Inflation and Inequality," CEPR Discussion Papers 3470, C.E.P.R. Discussion Papers.
- Stefania Albanesi, 2002. "Inflation and Inequality," Macroeconomics 0201002, EconWPA.
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- Jeroen Klomp & Jakob Haan, 2010. "Central bank independence and inflation revisited," Public Choice, Springer, vol. 144(3), pages 445-457, September.
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"The non-monotonic relationship between seigniorage and inequality,"
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"On Skill Heterogeneity, Human Capital, and Inflation,"
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