Sacrifice ratios and the income distribution: Stylized facts for OECD countries

Laura Acevedo and Marc Hofstetter

Economics Letters, 2023, vol. 232, issue C

Abstract: This paper examines the distributional consequences of disinflation by estimating sacrifice ratios (percentage output losses relative to the change in inflation) for different income quintiles and the top 1% of the income distribution. We find that at the tails of the distribution the average percentage output losses are considerably higher than at the center: 1.7 times greater at the left tail, 2.7 times greater at the top 1%.

Keywords: Monetary policy; Sacrifice ratios; Central banks; Inflation; Disinflation; Income distribution (search for similar items in EconPapers)
JEL-codes: D31 E31 E32 E52 E58 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:232:y:2023:i:c:s0165176523003543

DOI: 10.1016/j.econlet.2023.111329

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