Intergenerational Transmission of Inflation Aversion: Theory and Evidence

Etienne Farvaque () and Alexander Mihailov ()

No em-dp2008-71, Economics & Management Discussion Papers from Henley Business School, Reading University

Abstract: We study the evolution of inflation aversion preferences across generations. In the theoretical part of the paper, we analyze the dynamics of such preferences in an overlapping-generations model with heterogenous mature agents characterized by different degrees of inflation aversion. We show how the stability of a society’s degree of inflation aversion depends on the strength and speed of changes in the structure of the population. The empirical part then proposes two applications in support of the theoretical results. We first link demographic structures to inflation aversion, and then proceed by looking at the relations between income (in)equality and measures of inflation aversion.

Keywords: Intergenerational transmission; evolving preferences; inflation aversion; central bank independence; demographic change; income inequality (search for similar items in EconPapers)
JEL-codes: E24 E31 E58 J10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-mac, nep-mon and nep-upt
Date: 2008

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Related works:
Working Paper: Intergenerational Transmission of Inflation Aversion: Theory and Evidence (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:rdg:emxxdp:em-dp2008-71

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