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Energy inflation and consumption inequality

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  • Bettarelli, Luca
  • Estefania-Flores, Julia
  • Furceri, Davide
  • Loungani, Prakash
  • Pizzuto, Pietro

Abstract

This paper examines the effects of higher energy prices on consumption inequality for a large panel of 129 advanced and developing economies during the period 1970–2013. The results suggest that energy inflation increases the Gini measure of consumption inequality and reduces (increases) the share of consumption of lower (higher) income deciles. These effects are larger in developing economies, in countries with limited access to finance, in those with weaker monetary policy frameworks, during periods of economic slack and in cases where government transfers do not compensate the poorer deciles during times of adverse income shocks.

Suggested Citation

  • Bettarelli, Luca & Estefania-Flores, Julia & Furceri, Davide & Loungani, Prakash & Pizzuto, Pietro, 2023. "Energy inflation and consumption inequality," Energy Economics, Elsevier, vol. 124(C).
    • Handle: RePEc:eee:eneeco:v:124:y:2023:i:c:s0140988323003213
    DOI: 10.1016/j.eneco.2023.106823
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    More about this item

    Keywords

    Energy inflation; Energy prices; Inequality; Households;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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