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Income Inequality: Does Inflation Matter? By Ales Bulír Full Text of this Article (PDF 96 K) Abstract: This paper contributes to the income inequality literature that is based on the traditional Kuznets model. Level of development, state employment, fiscal redistribution, and price stability are found to improve income inequality in a given country. The positive impact of price stability on income distribution is nonlinear. The reduction in inflation from hyperinflationary levels significantly lowers income inequality, while further reduction toward a very low level of inflation seems to bring about negligible additional gains in the Gini coefficient. [JEL D31, O15, E31, C21]
© 2001 International Monetary Fund
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