Inflation and the Income Share of the Rich: Evidence for 12 OECD Countries

Mehdi El Herradi (), Jakob de Haan and Aurélien Leroy

No 8203, CESifo Working Paper Series from CESifo

Abstract: This paper examines the distributional implications of inflation on top income shares in 12 advanced economies using data over the period 1920-2016. We use Local Projections to analyze how top income shares respond to an inflation shock, and panel regressions in which all variables are defined as five-year averages to examine the impact of inflation on the position of the top-one-percent in the long run. Our findings suggest that inflation reduces the share of national income held by the top one percent. Furthermore, we find that inflation shocks and long-run inflation have similar effects on top income shares.

Keywords: inflation; inequality; top income shares; income distribution (search for similar items in EconPapers)
JEL-codes: D63 E50 E52 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-mac
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