Inflation, inequality, and social conflict
By: prepared by Christopher Crowe.
Contributors: International Monetary Fund. Research Dept.
Series: IMF working paper -- WP/06/158
Publisher: International Monetary Fund, Research Dept.
Published: 2006
Place of publication: Washington, D.C
Language: eng
Number of pages: 37
Subjects: Income distribution -- Econometric models.; Inflation (Finance) -- Social aspects.
Description: This paper presents and then tests a political economy model to analyze the observed positive relationship between income inequality and inflation. The model's key features are unequal access to both inflation-hedging opportunities and the political process. The model predicts that inequality and 'elite bias' in the political system interact to create incentives for inflation. The paper's empirical section focuses on this predicted interaction effect. The identification strategy involves using the end of the Cold War as a source of exogenous variation in the political environment. It finds robust evidence in support of the model.
Notes: "June 2006."

Includes bibliographical references (p. 34-37).

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