Further evidence on inflation targeting and income distribution

Thornton, John and Vasilakis, Chrysovalantis (2024) Further evidence on inflation targeting and income distribution. Southern Economic Journal. ISSN 0038-4038 (In Press)

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Abstract

This paper examines the effect of inflation targeting (IT) on income distribution in a panel of 70 countries. Employing panel regressions and a variety of propensity score matching methods, we find strong evidence that that incomes became more unequal in IT-adopting countries relative to countries that did not adopt IT. Panel regressions suggest that Gini coefficients increased by 0.25 to 0.57% and the share of income of the top 1% and 10% of households increased by 0.7% in IT adopter countries. Using propensity score matching methods, IT has been associated with a relative rise in Gini coefficients of about 1-2 percentage points, and a relative increase in the share of national income going to the top 1% and 10% of households by about 11-13 percentage points and 13-17 percentage points, respectively. The results are robust to changes in country sample and alternative estimation methodologies.

Item Type:	Article
Uncontrolled Keywords:	income distribution,gini coefficients,top income shares,inflation targeting,monetary policy,2* ,/dk/atira/pure/researchoutput/REFrank/2_
Faculty \ School:	Faculty of Social Sciences > Norwich Business School
Depositing User:	LivePure Connector
Date Deposited:	24 Sep 2024 12:55
Last Modified:	24 Sep 2024 12:55
URI:	https://ueaeprints.uea.ac.uk/id/eprint/96795
DOI:	issn:0038-4038

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