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Inflation and Income Inequality
Inflation and Income Inequality

Author(s): Arkadiusz Sieroń
Subject(s): Economy
Published by: Vysoká škola ekonomická v Praze
Keywords: Cantillon effect; income inequality; inflation; redistribution; wealth inequality

Summary/Abstract: The aim of this paper is to examine the relationship between inflation and income inequality. The article is mainly theoretical, but considerations presented are illustrated by relevant empirical data. Based on our analysis, we claim that inflation, which accelerated after the collapse of the Bretton Woods system in 1971, could have contributed to the rise in income inequality in the USA since the 1970s. Our article transcends the simple notion of an inflation tax and focuses on other redistributive mechanisms of inflation (Cantillon effect) as one of the main causes of income inequality.

  • Issue Year: 26/2017
  • Issue No: 6
  • Page Range: 633-645
  • Page Count: 13
  • Language: English