Macroeconomic Performance and Inequality in Colombia: 1976-1996

Fedesarrollo Working Paper No. 1

23 Pages Posted: 15 Jan 1998

See all articles by Mauricio Cardenas

Mauricio Cardenas

Fedesarrollo

Raquel Bernal

Universidad de los Andes, Colombia - Department of Economics

Jairo Nunez

Universidad de los Andes, Colombia - Department of Economics; Ministerio de la Proteccion Social

Fabio Sánchez

Universidad de los Andes, Colombia - Department of Economics

Date Written: November 1997

Abstract

This paper explores the relationship between macroeconomic conditions and urban income distribution in Colombia. The results show that unemployment and inflation have significant regressive effects. Manufacturing output growth is clearly progressive, as well as improved conditions in the rural areas. Currency overvaluation is also related to income concentration. In this sense, it is no surprise that the recent combination of high unemployment, an overvalued currency, and low overall economic growth have resulted in greater inequality. The paper also finds that unemployment and inflation have an adverse effect on education of the poor. Thus, macroeconomic instability is detrimental for the accumulation of human capital, which in turn has a long-term effect on the distribution of income.

JEL Classification: D31

Suggested Citation

Cardenas, Mauricio and Bernal, Raquel and Nunez Mendez, Jairo Augusto and Sánchez Torres, Fabio, Macroeconomic Performance and Inequality in Colombia: 1976-1996 (November 1997). Fedesarrollo Working Paper No. 1, Available at SSRN: https://ssrn.com/abstract=49222 or http://dx.doi.org/10.2139/ssrn.49222

Mauricio Cardenas (Contact Author)

Fedesarrollo ( email )

Calle 78 No 9-91
Santafe de Bogota, 75074
Colombia

Raquel Bernal

Universidad de los Andes, Colombia - Department of Economics ( email )

Carrera 1a No. 18A-10
Santafe de Bogota, AA4976
Colombia

Jairo Augusto Nunez Mendez

Universidad de los Andes, Colombia - Department of Economics ( email )

Carrera 1a No. 18A-10
Santafe de Bogota, AA4976
Colombia

Ministerio de la Proteccion Social

Cra. 13 No. 32-76 Piso 22
Bogota
Colombia

Fabio Sánchez Torres

Universidad de los Andes, Colombia - Department of Economics ( email )

Carrera 1a No. 18A-10
Santafe de Bogota, AA4976
Colombia
+57 1 332 4495 (Phone)
+57 1 332 4492 (Fax)

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