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Inflation and the Rich After the Global Financial Crisis

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  • Branimir Jovanovic

Abstract

This paper investigated the link between inflation and the top decile income share after the global financial crisis. The analysis was done on a sample of 42 countries. We found that higher inflation has reduced the income going to the top decile. The main explanation is that inflation has eroded their labour income, differently from the low-income individuals, which has been protected by minimum-wage increases. These findings imply that minimum wages should rise during inflationary episodes in order to prevent rising income inequality.

Suggested Citation

  • Branimir Jovanovic, 2014. "Inflation and the Rich After the Global Financial Crisis," LIS Working papers 613, LIS Cross-National Data Center in Luxembourg.
    • Handle: RePEc:lis:liswps:613
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    Cited by:

    1. Sinem Sefil-Tansever, 2017. "Income Distribution in Turkey during the Global Financial Crisis," Research in Applied Economics, Macrothink Institute, vol. 9(3), pages 91-107, September.

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    More about this item

    Keywords

    inequality; income distribution; top income share; financial crisis; Great Recession;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • G01 - Financial Economics - - General - - - Financial Crises

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