Does Inequality Cause Inflation? The Political Economy of Inflation, Taxation and Government Debt
AbstractA 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
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Bibliographic InfoPaper provided by Tilburg - Center for Economic Research in its series Papers with number 9230.
Length: 12 pages
Date of creation: 1992
Date of revision:
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Postal: TILBURG UNIVERSITY, CENTER FOR ECONOMIC RESEARCH, 5000 LE TILBURG THE NETHERLANDS.
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economic policy ; financial policy;
Other versions of this item:
- Beetsma, Roel M W J & van der Ploeg, Frederick, 1996. " Does Inequality Cause Inflation?: The Political Economy of Inflation, Taxation and Government Debt," Public Choice, Springer, vol. 87(1-2), pages 143-62, April.
- Beetsma, Roel & van der Ploeg, Frederick, 1992. "Does Inequality Cause Inflation? The Political Economy of Inflation, Taxation and Government Debt," CEPR Discussion Papers 741, C.E.P.R. Discussion Papers.
- Beetsma, R.M.W.J. & Ploeg, F. van der, 1992. "Does inequality cause inflation?: The political economy of inflation, taxation and government debt," Discussion Paper 1992-30, Tilburg University, Center for Economic Research.
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
- H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
- D3 - Microeconomics - - Distribution
- E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
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