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Inflation Inequality and the Measurement of Pro-Poor Growth

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  • Michael Grimm

    () (University of Göttingen, Department of Economics, DIW and DIAL)

  • Isabel Günther

    () (University of Göttingen, Department of Economics)

Abstract

The theoretical literature on pro-poor growth as well as its applications have not paid sufficient attention to the issue of varying inflation rates across the income distribution. Ignoring inflation inequality in pro-poor growth measurements can however severely bias assessments of pro-poor growth. Hence, we suggest simple methods which are able to redress such biases. As an empirical illustration we use the case of Burkina Faso and the growth incidence curve and poverty change decompositions as pro-poor growth measurements. _________________________________ La littérature théorique sur la croissance en faveur des pauvres ainsi que ses applications n'ont jusqu'à présent pas accordé suffisamment d'attention à l'aspect des variations des taux d'inflation au travers de la distribution des revenus. Ignorant l'inégalité de l'inflation dans les mesures de la croissance en faveur des pauvres peut cependant significativement biaiser l'analyse. Nous suggérons des méthodes appropriées simples pour redresser ce biais. Pour une illustration empirique, nous utilisons le cas du Burkina Faso ainsi que la courbe d'incidence de croissance et des décompositions des changements de pauvreté comme mesures de la croissance en faveur des pauvres.

Suggested Citation

  • Michael Grimm & Isabel Günther, 2005. "Inflation Inequality and the Measurement of Pro-Poor Growth," Working Papers DT/2005/08, DIAL (Développement, Institutions et Mondialisation).
  • Handle: RePEc:dia:wpaper:dt200508
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    References listed on IDEAS

    as
    1. S. J. Prais, 1959. "Whose Cost of Living?," Review of Economic Studies, Oxford University Press, vol. 26(2), pages 126-134.
    2. Kilpatrick, Robert W, 1973. "The Income Elasticity of the Poverty Line," The Review of Economics and Statistics, MIT Press, vol. 55(3), pages 327-332, August.
    3. Bart Hobijn & David Lagakos, 2005. "Inflation Inequality In The United States," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(4), pages 581-606, December.
    4. Stephan Klasen, 2003. "In Search of The Holy Grail: How to Achieve Pro-Poor Growth ?," Ibero America Institute for Econ. Research (IAI) Discussion Papers 096, Ibero-America Institute for Economic Research.
    5. Son, Hyun Hwa, 2004. "A note on pro-poor growth," Economics Letters, Elsevier, vol. 82(3), pages 307-314, March.
    6. Asep Suryahadi & Sudarno Sumarto & Lant Pritchett, 2003. "Evolution of Poverty During the Crisis in Indonesia," Asian Economic Journal, East Asian Economic Association, vol. 17(3), pages 221-241, September.
    7. Angus Deaton, 1998. "Getting Prices Right: What Should Be Done?," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 37-46, Winter.
    8. Datt, Gaurav & Ravallion, Martin, 1992. "Growth and redistribution components of changes in poverty measures : A decomposition with applications to Brazil and India in the 1980s," Journal of Development Economics, Elsevier, vol. 38(2), pages 275-295, April.
    9. Slesnick, Daniel T, 1993. "Gaining Ground: Poverty in the Postwar United States," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 1-38, February.
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    More about this item

    Keywords

    Poverty; Pro-poor Growth; Differential Inflation; Burkina Faso; Pauvreté; Croissance en faveur des pauvres; Inflation différentielle.;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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