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How Macroeconomic Factors Affect Income Distribution; The Cross-Country Evidence

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  • Michael Sarel

Abstract

This study develops a cross-section empirical framework to examine the relationship between the macroeconomic environment and trends in income distribution. The macroeconomic variables that are found to be associated with an improvement in income distribution are higher growth rate, higher income level, higher investment rate, real depreciation (especially for low-income countries), and improvement in terms of trade. The estimated significant effects of growth, income, and investment provide evidence that policies designed to promote investment and growth are likely also to contribute to an improvement in income distribution.

Suggested Citation

  • Michael Sarel, 1997. "How Macroeconomic Factors Affect Income Distribution; The Cross-Country Evidence," IMF Working Papers 97/152, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:97/152
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    Cited by:

    1. Pablo García & Camilo Pérez, 2016. "Desigualdad, Inflación, Ciclos y Crisis en Chile," Working Papers Central Bank of Chile 783, Central Bank of Chile.
    2. Mehmet Balcilar & Shinhye Chang & Rangan Gupta & Stephen M. Miller, 2016. "The Relationship between the Inflation Rate and Inequality across US States: A Semiparametric Approach," Working Papers 201682, University of Pretoria, Department of Economics.
    3. Frances Stewart, 2003. "Income distribution and development," Chapters,in: Trade and Development, chapter 10 Edward Elgar Publishing.
    4. Nguyen, Trang T.T., 2016. "Tax administration resources and Income inequality," MPRA Paper 74820, University Library of Munich, Germany.
    5. Ali Abdel Gadir Ali, "undated". "Can the Sudan Reduce Poverty by Half by the Year 2015?," API-Working Paper Series 0304, Arab Planning Institute - Kuwait, Information Center.
    6. Frances Stewart, "undated". "Adjustment and Poverty in Asia: Old Solutions and New Problems -," QEH Working Papers qehwps20, Queen Elizabeth House, University of Oxford.

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