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Macroeconomic Performance and Inequality: Brazil 1983-1994

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  • Manoel Bittencourt

Abstract

We examine how poor macroeconomic performance, mainly in the role of high rates of inflation, affected earnings inequality in the 1980s and early 1990s in Brazil. The results based initially on aggregate time-series, and then on the relatively novel sub-national panel time-series data and analysis show that the extreme inflation, combined with an imperfect process of financial adaptation and an incomplete indexation coverage, had a regressive and significant impact on inequality. The implication of the results is that sound macroeconomic policies, which keep inflation low and stable in the long-run, should be a necessary first step of any policy package implemented to alleviate inequality in Brazil.

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Bibliographic Info

Paper provided by Economic Research Southern Africa in its series Working Papers with number 101.

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Date of creation: 2008
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Handle: RePEc:rza:wpaper:101

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Keywords: Inequality; in‡ation; indexation; …nancial adaptation; Brazil;

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