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Inflation and inequality

  • Albanesi, Stefania

Cross-country evidence on inflation and income inequality suggests that they are positively related. I explore the hypothesis that this correlation is the outcome of a distributional conflict underlying the determination of fiscal policy. I study a bargaining model of the political system in which inflation and inequality are positively correlated due to the relative vulnerability to inflation of low income households.

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Article provided by Elsevier in its journal Journal of Monetary Economics.

Volume (Year): 54 (2007)
Issue (Month): 4 (May)
Pages: 1088-1114

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Handle: RePEc:eee:moneco:v:54:y:2007:i:4:p:1088-1114
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