Does inflation targeting increase income inequality?
Research output: Contribution to journal › Article › peer-review
Electronic versions
Documents
- Does inflation targeting increase income inequality
Final published version, 1.83 MB, PDF document
Licence: CC BY-NC-ND Show licence
DOI
We contribute to the growing empirical literature on the impact
of monetary policy on income distribution by focusing on the impact of adopting an inflation targeting (IT) regime to guide monetary policy. We assess the impact employing a panel of 121 advanced and developing economies, including 27 IT adopters, during the period 1971–2015. Our results suggest that IT adoption has contributed to greater inequality of household income as measured by the Gini coefficient and to a reduced share of GDP going to labor compensation. The results are robust to alternative estimation methodologies and to variations in the sample with respect to countries and data frequency.
of monetary policy on income distribution by focusing on the impact of adopting an inflation targeting (IT) regime to guide monetary policy. We assess the impact employing a panel of 121 advanced and developing economies, including 27 IT adopters, during the period 1971–2015. Our results suggest that IT adoption has contributed to greater inequality of household income as measured by the Gini coefficient and to a reduced share of GDP going to labor compensation. The results are robust to alternative estimation methodologies and to variations in the sample with respect to countries and data frequency.
Keywords
- income distribution, inflation targeting, monetary policy
| Original language | English |
|---|---|
| Article number | 4 |
| Pages (from-to) | 558–580 |
| Number of pages | 23 |
| Journal | Journal of Post Keynesian Economics |
| Volume | 45 |
| Issue number | 4 |
| DOIs | |
| Publication status | Published - 28 Jul 2022 |
Total downloads
No data available