The effect of doubling the minimum wage and decreasing taxes on inflation in Mexico

Raymundo Campos-Vazquez and Gerardo Esquivel ()

Economics Letters, 2020, vol. 189, issue C

Abstract: We analyze the effect on inflation of doubling the minimum wage and cutting the value-added tax in half. Annual inflation decreased by 1.8 percentage points, suggesting that the minimum wage increase had a limited or even null effect on prices.

Keywords: Prices; Inflation; Minimum wage; Taxes; Mexico (search for similar items in EconPapers)
JEL-codes: E31 E65 H22 I30 O54 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:189:y:2020:i:c:s0165176520300616

DOI: 10.1016/j.econlet.2020.109051

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