Inflation and the Income Share of the Rich: Evidence for 14 OECD Countries

Mehdi El Herradi*, Jakob de Haan, Aurélien Leroy

*Corresponding author for this work

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1 Citation (Scopus)
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Abstract

This paper examines the distributional implications of inflation on top income shares in 14 advanced economies using data over the period 1920–2016. We use local projections to analyze how top income shares respond to an inflation shock, and panel regressions in which all variables are defined as 5-year averages to examine the impact of inflation on the position of the top-one-percent in the long run. Our findings suggest that inflation reduces the share of national income held by the top 1 percent. Furthermore, we find that inflation shocks and long-run inflation have similar effects on top income shares.

Original languageEnglish
JournalReview of Income and Wealth
DOIs
Publication statusAccepted/In press - 1-Mar-2022

Keywords

  • income distribution
  • inequality
  • inflation
  • top income shares

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