Inflation, Growth, and Income Distribution: A Cross-Country

Hongyi Li


Heng-fu Zou

This short paper uses a newly compiled cross-country panel data on income distribution to explore the impact of inflation on income distribution and economic growth. We have found that inflation (1) worsens income distribution; (2) increases the income share of the rich; (3) has a negative but insignificant effect on the income shares of the poor and the middle class; and (4) reduces the rate of economic growth.

Key Words: Inflation; Income distribution; Growth.
JEL Classification Numbers: D3, E3, O4.