Inflation and Income Distribution: Further Evidenceon Empirical Links

Bulı́ř, Aleš; Gulde, Anne

doi:10.5089/9781451850826.001

Cited by 38 publications

(27 citation statements)

References 26 publications

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“…Concerning the fiscal variables, it is noteworthy that current public expenditure has a significant and sizeable negative effect on income inequality; it reduces income inequality regardless of whether it is financed by direct or indirect taxes. This result is consistent with Bulir and Gulde (1995), Gustafsson and Johansson (1999), Li et al . (2000), Galli and van der Hoeven (2001), and Afonso et al .…”

Section: Resultssupporting

confidence: 93%

Economic Growth and Inequality: The Role of Fiscal Policies*

Muinelo‐Gallo

Roca‐Sagalés

2011

Australian Economic Papers

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Section: Resultssupporting

confidence: 93%

Economic Growth and Inequality: The Role of Fiscal Policies*

Muinelo‐Gallo

Roca‐Sagalés

2011

Australian Economic Papers

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“…Yet, for both sample periods there seems to be some support for a negative correlation at the first lead of the Gini pointing to an inequality reducing effect of inflation. To some extent this seems to be in line with studies from the 1990s that find current inflation to be of progressive nature in the postwar U.S. (Bulir andGulde, 1995 andJäntti, 1994). 5 However, the effect is ambiguous as it changes sign with the second lead.…”

Section: Correlation Analysissupporting

confidence: 69%

Tax bracket creep and its effects on income distribution

Heer

Süßmuth

2013

Journal of Macroeconomics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We quantitatively analyze the way inflation alters the inequality of the income distribution in the U.S. economy. The main mechanism emphasized in this paper is the "bracket creep" effect according to which inflation pushes income into higher tax brackets. Governments adjust the nominal income tax brackets slowly and incompletely due to the rise in prices. In the U.S. postwar history, this typically happens less often than once every other tax year. In the first part of the paper, we study time series from the U.S. economy. As our central result we find that irrespective of the level of inflation more frequent income tax schedule adjustments make the relationship between inflation and income inequality more transitory in nature. In the second part of the paper, we develop a general equilibrium monetary model with income heterogeneity that is in line with our time series evidence. We find that a longer duration between two successive adjustments of the tax schedule reduces employment, savings, and output. Terms of use: Documents inJEL classification: D31, E31, E44, E52, E62

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“…One of the most tested theories of income inequality is the wellknown Kuznets hypothesis (Kuznets 1955), which predicts an inverted-U relationship between inequality and the level of economic development (see, among others, Galor and Tsiddon 1996;Barro 2000;Li, Xie, and Zou 2000). Further studies focus on other macroeconomic factors such as globalization (Edwards 1997;Alderson and Nielsen 2002;Dreher and Gaston 2008), inflation (Bulir and Gulde 1995;Galli and van der Hoeven 2001) or financial development (Clarke et al 2006) to explain variations in income inequality across countries.…”

Section: Introductionmentioning

confidence: 99%

Social Spending Generosity and Income Inequality: A Dynamic Panel Approach

Niehues

2010

SSRN Journal

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SOEPpapers on Multidisciplinary Panel Data Research at DIW BerlinThis series presents research findings based either directly on data from the German SocioEconomic Panel Study (SOEP) or using SOEP data as part of an internationally comparable data set (e.g. CNEF, ECHP, LIS, LWS, CHER/PACO). SOEP is a truly multidisciplinary household panel study covering a wide range of social and behavioral sciences: economics, sociology, psychology, survey methodology, econometrics and applied statistics, educational science, political science, public health, behavioral genetics, demography, geography, and sport science.The decision to publish a submission in SOEPpapers is made by a board of editors chosen by the DIW Berlin to represent the wide range of disciplines covered by SOEP. There is no external referee process and papers are either accepted or rejected without revision. Papers appear in this series as works in progress and may also appear elsewhere. They often represent preliminary studies and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be requested from the author directly. AbstractThis paper explores whether more generous social spending polices in fact lead to less income inequality, or if redistributive outcomes are offset by behavioral disincentive effects. To account for the inherent endogeneity of social policies with regard to inequality levels, I apply the System GMM estimator and use the presumably random incidence of certain diseases as instruments for social spending levels. The regression results suggest that more social spending effectively reduces inequality levels. The result is robust with respect to the instrument count and different data restrictions. Looking at the structure of benefits, particularly unemployment benefits and public pensions are responsible for the inequality reducing impact. More targeted benefits, however, do not significantly reduce income inequality. Rather, their positive effect on pregovernment income inequality hints at substantial disinctive effects.

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Inflation and Income Distribution: Further Evidenceon Empirical Links

Abstract: This is a Working Paper and the author(s) would welcome IMF WORKING PAPER any comments on the present text. Citations should refer to a Working Paper of the International Monetary Fund, mentioning the author(s), and the date of issuance. The views

Cited by 38 publications

References 26 publications

Economic Growth and Inequality: The Role of Fiscal Policies*

Economic Growth and Inequality: The Role of Fiscal Policies*

Tax bracket creep and its effects on income distribution

Social Spending Generosity and Income Inequality: A Dynamic Panel Approach

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