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Inflation and the Income Share of the Rich: Evidence for 14 OECD Countries

Author

Listed:
  • Mehdi El Herradi
  • Jakob Haan
  • Aurélien Leroy

    (BSE - Bordeaux Sciences Economiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper examines the distributional implications of inflation on top income shares in 14 advanced economies using data over the period 1920–2016. We use local projections to analyze how top income shares respond to an inflation shock, and panel regressions in which all variables are defined as 5-year averages to examine the impact of inflation on the position of the top-one-percent in the long run. Our findings suggest that inflation reduces the share of national income held by the top 1 percent. Furthermore, we find that inflation shocks and long-run inflation have similar effects on top income shares

Suggested Citation

  • Mehdi El Herradi & Jakob Haan & Aurélien Leroy, 2022. "Inflation and the Income Share of the Rich: Evidence for 14 OECD Countries," Post-Print hal-03604673, HAL.
  • Handle: RePEc:hal:journl:hal-03604673
    DOI: 10.1111/roiw.12580
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    Cited by:

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    2. Frost, Jon & Gambacorta, Leonardo & Gambacorta, Romina, 2022. "On the nexus between wealth inequality, financial development and financial technology," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 429-451.

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    More about this item

    Keywords

    inflation; inequality; top income shares; income distribution;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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