The impact of inflation on inequality in the CEMAC and UEMOA zones of Sub‐Saharan Africa

Mihai Mutascu (), Albert Lessoua and Nicolae Bogdan Ianc
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Mihai Mutascu: LEO - Laboratoire d'Économie d'Orleans [2022-...] - UO - Université d'Orléans - UT - Université de Tours - UCA - Université Clermont Auvergne
Nicolae Bogdan Ianc: LEO - Laboratoire d'Économie d'Orleans [2022-...] - UO - Université d'Orléans - UT - Université de Tours - UCA - Université Clermont Auvergne

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Abstract: Abstract This paper explores the impact of inflation on income inequality in Sub‐Saharan Africa, over the period from 1997 to 2019. The Bayesian model averaging method, à la De Luca and Magnus (2011), is employed to empirically support the main conclusions. The main finding highlights that inflation has an asymmetrical impact on inequality in the Sub‐Saharan African (SSA) region, diminishing income disparities among the wealthy while exacerbating them among the impoverished. The results are sensitive to the economic characteristics of the country as well as the level of income brackets. Education, health expenditures, size of agriculture, economic development and control of corruption play pivotal roles in modelling the relationship between inflation and income inequality in the SSA region. Social safety net programs, monetary policies aimed at addressing inflation, investments in education, fostering inclusive economic growth, enhancing access to financial services for the impoverished, reforms to advance land rights and promoting regional cooperation should be the primary policy objectives for SSA countries.

Date: 2024-05-13
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Published in International Journal of Finance and Economics, 2024, pp.1-22. ⟨10.1002/ijfe.2993⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04721018

DOI: 10.1002/ijfe.2993

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