Income Inequality: Does Inflation Matter?

21 Pages Posted: 17 Jan 2006

See all articles by Aleš Bulíř

Aleš Bulíř

International Monetary Fund (IMF)


This paper contributes to the income inequality literature that is based on the traditional Kuznets model. Level of development, state employment, fiscal redistribution, and price stability are found to improve income inequality in a given country. The positive impact of price stability on income distribution is nonlinear. The reduction in inflation from hyperinflationary levels significantly lowers income inequality, while further reduction toward a very low level of inflation seems to bring about negligible additional gains in the Gini coefficient.

Keywords: inflation, income distribution, Kuznets hypothesis

JEL Classification: D31, O15, E31, C21

Suggested Citation

Bulir, Ales, Income Inequality: Does Inflation Matter?. IMF Staff Papers, Vol. 48, No. 1, 2001, Available at SSRN:

Ales Bulir (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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