Inflation, Inequality and Social Conflict
Abstract
This paper presents and then tests a political economy model to analyze the observed positive relationship between income inequality and inflation. The model's key features are unequal access to both inflation-hedging opportunities and the political process. The model predicts that inequality and 'elite bias' in the political system interact to create incentives for inflation. The paper's empirical section focuses on this predicted interaction effect. The identification strategy involves using the end of the Cold War as a source of exogenous variation in the political environment. It finds robust evidence in support of the model.(This abstract was borrowed from another version of this item.)
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Paper provided by Money Macro and Finance Research Group in its series Money Macro and Finance (MMF) Research Group Conference 2004 with number 69.Length:
Date of creation: 17 Sep 2004
Date of revision:
Handle: RePEc:mmf:mmfc04:69
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Web page: http://www.essex.ac.uk/afm/mmf/index.html
Related research
Keywords:Other versions of this item:
- Christopher Crowe, 2004. "Inflation, Inequality and Social Conflict," CEP Discussion Papers dp0657, Centre for Economic Performance, LSE.
- Christopher W. Crowe, 2006. "Inflation, Inequality, and Social Conflict," IMF Working Papers 06/158, International Monetary Fund.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- H - Public Economics
This paper has been announced in the following NEP Reports:
- NEP-AFR-2004-09-30 (Africa)
- NEP-ALL-2004-09-30 (All new papers)
References
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Manoel Bittencourt, 2008.
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