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Macroeconomic Performance And Inequality: Brazil, 1983-94

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  • Manoel BITTENCOURT

Abstract

This paper examines how macroeconomic performance affected earnings inequality during the 1980’s and early 90’s in Brazil. The evidence shows that the chronic high inflation existent at the time had a clear and significant effect in raising inequality. The results based on panel time series data and analysis are robust for different concepts of inflation, inequality measures, estimators and specifications. The economic intuition suggests that high inflation rates combined with incomplete indexation coverage more than offset any progressive effect expectedly coming from the debtor and creditor channel. Hence, credible and stable macroeconomic policies, which keep inflation low and under control in the long run is to be a necessary first step of any public policy package implemented to tackle the high levels of inequality existent in Brazil.
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  • Manoel BITTENCOURT, 2009. "Macroeconomic Performance And Inequality: Brazil, 1983-94," The Developing Economies, Institute of Developing Economies, vol. 47(1), pages 30-52.
  • Handle: RePEc:bla:deveco:v:47:y:2009:i:1:p:30-52
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    Cited by:

    1. Bittencourt, Manoel, 2011. "Inflation and financial development: Evidence from Brazil," Economic Modelling, Elsevier, vol. 28(1), pages 91-99.
    2. Bittencourt, Manoel, 2010. "Democracy, Populism and Hyperinflation[s]: Evidence from Latin America," Proceedings of the German Development Economics Conference, Hannover 2010 47, Verein für Socialpolitik, Research Committee Development Economics.
    3. Azevedo, Joao Pedro & David, Antonio C. & Bastos, Fabiano Rodrigues & Pineda, Emilio, 2014. "Fiscal adjustment and income inequality : sub-national evidence from Brazil," Policy Research Working Paper Series 6945, The World Bank.
    4. Bittencourt, Manoel, 2012. "Inflation and economic growth in Latin America: Some panel time-series evidence," Economic Modelling, Elsevier, vol. 29(2), pages 333-340.
    5. Manoel Bittencourt, 2014. "Economic Growth and Inequality: Evidence from the Young Democracies of South America," International Symposia in Economic Theory and Econometrics,in: Macroeconomic Analysis and International Finance, volume 23, pages 37-58 Emerald Publishing Ltd.
    6. Manoel Bittencourt, 2012. "Democracy, populism and hyperinflation: some evidence from Latin America," Economics of Governance, Springer, vol. 13(4), pages 311-332, December.
    7. Meyer Bittencourt, Manoel F., 2006. "Financial Development and Inequality: Brazil 1985-99," Proceedings of the German Development Economics Conference, Berlin 2006 5, Verein für Socialpolitik, Research Committee Development Economics.
    8. Manoel Bittencourt, 2009. "Polarisation, Populism and Hyperinflation[s]: Some Evidence from Latin America," Working Papers 200921, University of Pretoria, Department of Economics.

    More about this item

    JEL classification:

    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • D30 - Microeconomics - - Distribution - - - General
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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