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

Author

Listed:
  • Mehdi El Herradi

    (Aix-Marseille Univ, CNRS, AMSE, Marseille, France.)

  • Jakob de Haan

    (De Nederlandsche Bank)

  • Aurelien Leroy

    (University of Bordeaux)

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 five-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 one percent. Furthermore, we find that inflation shocks and long-run inflation have similar effects on top income shares.

Suggested Citation

  • Mehdi El Herradi & Jakob de Haan & Aurelien Leroy, 2021. "Inflation and the Income Share of the Rich: Evidence for 14 OECD Countries," Working Papers 570, ECINEQ, Society for the Study of Economic Inequality.
  • Handle: RePEc:inq:inqwps:ecineq2021-570
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2021-570.pdf
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    References listed on IDEAS

    as
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    Cited by:

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    3. Sintos, Andreas, 2023. "Does inflation worsen income inequality? A meta-analysis," Economic Systems, Elsevier, vol. 47(4).

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    More about this item

    Keywords

    Inflation; Inequality; Top income shares;
    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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