Inflation and the Poor

32 Pages Posted: 15 Oct 2000

See all articles by William Easterly

William Easterly

New York University - Department of Economics

Stanley Fischer

Bank of Israel; National Bureau of Economic Research (NBER); International Monetary Fund (IMF)

Multiple version iconThere are 2 versions of this paper

Date Written: May 2000

Abstract

The poor suffer more from inflation than the rich do, reveals this survey of poor people in 38 countries.

Using polling data for 31,869 households in 38 countries and allowing for country effects, Easterly and Fischer show that the poor are more likely than the rich to mention inflation as a top national concern. This result survives several robustness checks.

Also, direct measures of improvements in well-being for the poor - the change in their share of national income, the percentage decline in poverty, and the percentage change in the real minimum wage - are negatively correlated with inflation in pooled cross-country samples.

High inflation tends to lower the share of the bottom quintile and the real minimum wage - and tends to increase poverty.

This paper - a joint product of Macroeconomics and Growth, Development Research Group, and the International Monetary Fund - is part of a larger effort to study the effects of macroeconomic policies on growth and poverty.

JEL Classification: E310,O110,D310,I300

Suggested Citation

Easterly, William and Fischer, Stanley, Inflation and the Poor (May 2000). World Bank Policy Research Working Paper No. 2335. Available at SSRN: https://ssrn.com/abstract=245806

William Easterly (Contact Author)

New York University - Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States

Stanley Fischer

Bank of Israel ( email )

P.O. Box 780
Jerusalem, 91907
Israel

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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