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The Relationship between the Inflation Rate and Inequality across U.S. States: A Semiparametric Approach

Mehmet Balcilar (), Shinhye Chang, Rangan Gupta () and Stephen Miller ()
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Shinhye Chang: University of Pretoria

No 2017-14, Working papers from University of Connecticut, Department of Economics

Abstract: This paper uses a cross-state panel for the United States over the 1976 to 2007 period to assess the relationship between income inequality and the inflation rate. Employing a semiparametric instrument variable (IV) estimator, we find that the relationship depends on the level of the inflation rate. A positive relationship occurs only if the states exceed a threshold level of inflation rate. Below this value, inflation rate lowers income inequality. The results suggest that a nonlinear relationship exists between income inequality and the inflation rate.

Keywords: Income inequality; Inflation rate; Semiparametric instrumental variable estimator (search for similar items in EconPapers)
JEL-codes: E31 D31 C14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac
Date: 2017-06
Note: Stephen Miller is the corresponding author
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Related works:
Journal Article: The relationship between the inflation rate and inequality across U.S. states: a semiparametric approach (2018) Downloads
Working Paper: The Relationship between the Inflation Rate and Inequality across US States: A Semiparametric Approach (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:uct:uconnp:2017-14

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