INEQUALITY AND INFLATION IN THE EUROPEAN UNION
INEQUALITY AND INFLATION IN THE EUROPEAN UNION

Summary/Abstract: Inflation and income inequality are actual major challenges in Europe, but a better understanding of these phenomena should consider their connection. In this paper, the impact of inflation on income inequality in the EU is assessed using dynamic panel system generalized method of moments (SGMM) estimator. The novelty of this research is given by the consideration of gender pay gap as a measure of income inequality and the evaluation of inflation impact of gender pay gap. The results indicated that inflation had a negative impact on Gini index in the period 1990-2024, but a positive one in the period 2006-2024. Moreover, a non-linear relationship is also supported in both periods. In addition, unemployment and poverty partially mediated the relationship between inflation and Gini index. However, inflation had no significant effect on gender pay gap.

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