How does inflation influence income inequality in Russia?

2020 ◽  
pp. 54-66 ◽  
Author(s):  
Philipp S. Kartaev ◽  
Olga A. Klachkova ◽  
Anna S. Lukianova
Keyword(s):  
Income Inequality ◽  
Inflation Targeting ◽  
Price Stability ◽  
Russian Regions ◽  
Wealth Transfer ◽  
Quantitative Estimates ◽  
Monetary Authorities ◽  
The Impact ◽  
Redistributive Effect ◽  
Double Digit

The paper studies the impact of inflation on income inequality in Russian regions. It was revealed that the reduction in inflation from double-digit rate to the Bank of Russia’s target did not help to mitigate inequality, but rather exacerbated it. We identified a group of products which changing price dynamics affects inequality. The price increase may lead to the decline in inequality through redistributive effect. It is shown that in Russia this effect is associated with the channel of unexpected inflation that results in real wealth transfer from more prosperous lenders to less well-off borrowers. The policy of inflation targeting, successfully implemented by the monetary authorities in recent years, has reduced the volatility of inflation and limited the operation of this channel. At the same time, quantitative estimates of the increase in inequality as a result of achieving price stability remain relatively low.

scholarly journals THE IMPACT OF ECONOMIC, DEMOGRAPHIC, AND INFRASTRUCTURAL FACTORS ON INCOME INEQUALITY AND POVERTY IN RUSSIA

2020 ◽  
Vol 1 ◽  
pp. 70-75
Author(s):  
Rogneda Groznykh ◽  
Elena Ignatieva ◽  
Oleg Mariev ◽  
Alla Serkova
Keyword(s):  
Income Inequality ◽  
Life Expectancy ◽  
University Graduates ◽  
Russian Regions ◽  
Average Life Expectancy ◽  
Explanatory Variables ◽  
Prime Objective ◽  
Relative Change ◽  
The Impact ◽  
The Relationship

The prime objective of the research is to examine the factors influencing both the alteration in the income distribution and the relative change in the incidence of poverty in the regions of Russia. The list of the identified factors/determinants includes economic, demographic, and infrastructural factors. An econometric model, indicating the relationship between the explanatory variables with both the income inequality index and the relative poverty proportions in Russian regions has been provided in this article. The determinants that cause variations in the income inequality and poverty of a country such as social mobility, average life expectancy of urban women, life expectancy of rural men, the number of university graduates, etc. have also been specified in this study. The analysis was executed based on a dataset of 72 Russian regions for the period between 2012-2017.

scholarly journals Friedman Meets Hayek on Money and Prices in Canada

2016 ◽  
Vol 8 (1) ◽  
pp. 69-96
Author(s):  
Kam Hon Chu
Keyword(s):  
Inflation Targeting ◽  
Price Level ◽  
Relative Price ◽  
Price Stability ◽  
Business Cycle Theory ◽  
Relative Prices ◽  
General Price Level ◽  
Price Indexes ◽  
Monetary Shock ◽  
The Impact

Though both classical liberals, Friedman adopted the quantity theory of money and used the general price indexes and aggregate data in empirical analysis, whereas Hayek rejected aggregative analyses as potentially misleading and focused on the impact of money on relative prices in his business cycle theory. This study shows theoretically that when the central bank minimizes the monetary shock to maintain stability in the general price level, it also maintains simultaneously relative price stability, thus narrowing the divergence between Friedman and Hayek. This finding is empirically verified by Canada’s experience with inflation targeting since 1991

Neoliberalism and its Consequences in Brazil

2002 ◽  
Vol 34 (4) ◽  
pp. 945-959 ◽  
Author(s):  
EDMUND AMANN ◽  
WERNER BAER
Keyword(s):  
Income Inequality ◽  
Income Distribution ◽  
Market Reform ◽  
Capital Inflows ◽  
Price Stability ◽  
Policy Options ◽  
Critical Problem ◽  
Neoliberal Policies ◽  
The Impact

This article examines the impact of a decade of neoliberal policies on poverty and income distribution in Brazil. It demonstrates that while trade and market reform contributed towards the attainment of price stability and accelerated capital inflows, little was achieved by way of reducing income inequality and poverty. The article concludes by outlining the policy options which might be adopted to tackle this critical problem.

Taxes, Expenditures and Income Distribution in Switzerland

1985 ◽  
Vol 14 (3) ◽  
pp. 341-360 ◽  
Author(s):  
Robert E. Leu ◽  
Rene L. Frey ◽  
Brigitte Buhmann
Keyword(s):  
Income Inequality ◽  
Income Distribution ◽  
Government Policies ◽  
Government Budget ◽  
The Social ◽  
Welfare Expenditures ◽  
The Government ◽  
Incidence Analysis ◽  
The Impact ◽  
Redistributive Effect

AbstractIn this paper, we analyse the impact of government policies on income distribution and poverty in Switzerland. First, we give an overview of the Swiss welfare system and provide an estimate of the poverty problem in this country. Second, we discuss some major problems of fiscal incidence analysis. Third, we examine the impact of taxes and expenditures on income distribution in Switzerland using a budget incidence approach. The analysis is based mainly on the first nationwide representative Income and Wealth Survey 1980 conducted by the authors. The major findings are the following:1 The government budget, including the social security system, has a significant redistributive effect which is due mainly to expenditures rather than to taxation.2 Direct taxes reduce income inequality, measured by the Gini coefficient; indirect taxes increase it. The net effect of all taxes is to reduce income inequality.3 The redistributive effect of social welfare expenditures is larger than that of other government expenditures.

scholarly journals ASSESSMENT OF THE IMPACT OF INCOME INEQUALITY ON ECONOMIC GROWTH IN RUSSIAN REGIONS

2021 ◽  
Vol 2 ◽  
pp. 106-110
Author(s):  
Rogneda Vasilyeva ◽  
Oleg Mariev ◽  
Elena Ignatieva ◽  
Alla Serkova
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Income Inequality ◽  
Capital Investment ◽  
Cultural Development ◽  
Russian Regions ◽  
Socio Economic Development ◽  
Per Capita ◽  
Fixed Capital Investment ◽  
The Impact

Inequality in the distribution of income of the population has a certain impact on different aspects of the economic and socio-cultural development of countries and regions. This inequality arises due to a number of factors as the current nature of the production specialization, the availability of production and economic infrastructure, the achieved level of development of the social sphere, socio-cultural, demographic, and other factors. The main objective of this study is to assess the nature and extent of the impact of income inequality in the Russian regions for the subsequent justification of the directions of socio-economic development. We conducted an econometric analysis of the impact of intraregional income inequality (the Gini coefficient), fixed capital investment per capita, and average per capita consumer spending on one of the main indicators of regional economic growth (GRP) per capita was carried out. The model is based on panel data for the period 2012-2018 for 85 regions of the Russian Federation. The results of the study confirm two of three hypotheses. As prospects for further research, it is proposed to consider the impact of inequality in the distribution of household income on economic growth for different groups of regions, including resource-type regions and regions with a predominance of manufacturing industries, as well as for leading regions and regions with a relatively low level of socio-economic development.

Chasing Disparity: Economic Development Incentives and Income Inequality in the U.S. States

2020 ◽  
Vol 20 (4) ◽  
pp. 462-488 ◽  
Author(s):  
Joshua M. Jansa
Keyword(s):  
Economic Development ◽  
Income Inequality ◽  
Development Policy ◽  
State Governments ◽  
Economic Development Policy ◽  
Economic Development Incentives ◽  
Using Data ◽  
Development Incentives ◽  
The Impact ◽  
Redistributive Effect

Political scientists and policy scholars have traditionally looked at the role of welfare and tax policies in shaping income inequality. Less attention has been paid to the key policy area of economic development. But states spend billions on economic development incentives each year to encourage firms to locate in their state. The few studies that have examined the impact of economic development policy on inequality have found mixed results, and have not considered who shapes and benefits from economic development policy when identifying possible causal mechanisms. I argue that increased incentive spending leads to increased inequality through either a market conditioning effect (incentives disproportionately boost the incomes of top earners prior to taxes) or a redistributive effect (incentives allow wealthy firms, investors, and employees to keep income that would otherwise be taxed and transferred). These mechanisms are tested using data on incentive spending and inequality across the 50 states from 1999 to 2014. The findings demonstrate that incentives increase income inequality via a redistributive effect only. This effect, though, is relatively large, long-lasting, and robust to different measures of incentive spending. Despite using economic development incentives to try to generate greater prosperity, state governments may be inadvertently exacerbating inequality.

scholarly journals Does income inequality matter for CO2 emissions in Russian regions?

Equilibrium ◽  
2021 ◽  
Vol 16 (3) ◽  
pp. 533-551
Author(s):  
Natalia Davidson ◽  
Oleg Mariev ◽  
Sophia Turkanova
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Co2 Emissions ◽  
Environmental Kuznets Curve ◽  
Value Added ◽  
International Perspective ◽  
Kuznets Curve ◽  
Russian Regions ◽  
Fixed And Random Effects ◽  
The Impact

Research background: Intensive economic growth in Russian regions during recent decades has been associated with numerous environmental issues, particularly increasing CO2 emissions, as well as income inequality. To achieve sustainable development, it is necessary to resolve these issues. Purpose of the article: To shed light on the impact of income inequality on CO2 emissions based on Russian regional data covering the years 2004?2018. Methods: Gini index and decile dispersion ratio are used to measure income inequality. To study the impact of income inequality on CO2 emissions in the Russian regions, we estimate econometric models with fixed and random effects and apply GMM method. We test the hypothesis of the environmental Kuznets curve to determine the impact of economic growth on CO2 emissions. Findings & value added: The results show that CO2 emissions increase in tandem with growth in income inequality between 10% of people with the lowest income and 10% of people with the highest income. Simultaneously, CO2 emissions decrease with growth of Gini coefficient. The hypothesis of the Environmental Kuznets Curve was confirmed based on GMM method. Our findings underscore that the activities of the extraction and manufacturing sectors, as well as energy consumption, increase CO2 emissions. The chief significance of this paper is the finding that large income gap between extremely rich and extremely poor population cohorts increases CO2 emissions. This implies that economic policy aimed at reducing income inequality in Russian regions will also reduce CO2 emissions, especially if accompanied by increased use of environmentally friendly technologies. From the international perspective, our research can be extended to study other countries and regions.

scholarly journals SAY NO TO INFLATION TARGETING: A CALL FOR THE ADAPTATION OF A ZERO-INTEREST REGIME

2021 ◽  
Vol 7 (3) ◽  
Author(s):  
Atiq Ur Rehman
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Inflation Targeting ◽  
Full Employment ◽  
Central Banks ◽  
Policy Framework ◽  
Price Stability ◽  
Socioeconomic Indicators ◽  
Wide Range ◽  
The Impact

In its early history, monetary policy focused on numerous objectives, including stable growth, full employment, stable exchange rates and price stability. In the 1990s, many countries shifted their monetary policy framework from monetary aggregate/interest rate targeting to inflation targeting, in which inflation was regarded as the primary target of monetary policy, and interest rates the primary tool for achieving target inflation. Inflation targeting has diverted the focus of central banks from growth and employment to price stability. Unfortunately, there is considerable evidence which shows that inflation targeting frameworks are unable to control inflation in the way central banks want, and in fact lead to a greater departure from optimal growth and employment, the two key targets of sustainable development goals (SDGs). There is also evidence suggesting a strong association between inflation targeting and the move away from several other SDGs. Employing a systematic review of the related literature and Granger causality tests applied to data from various countries, this paper shows that inflation targeting fails to control inflation and has several undesirable impacts on a wide range of socioeconomic indicators. It is argued that the zero-interest regime is the optimal regime with respect to the impact on socioeconomic indicators, and also supports the interest free economy advocated by Islam.

Monetary policy and the effect of the transfer of oil prices to inflation

2020 ◽  
pp. 41-50
Author(s):  
Ph. S. Kartaev ◽  
I. D. Medvedev
Keyword(s):  
Monetary Policy ◽  
Inflation Targeting ◽  
Dynamic Models ◽  
Oil Prices ◽  
Oil Price ◽  
Oil Price Shocks ◽  
Negative Effects ◽  
Price Shocks ◽  
Policy Regime ◽  
The Impact

The paper examines the impact of oil price shocks on inflation, as well as the impact of the choice of the monetary policy regime on the strength of this influence. We used dynamic models on panel data for the countries of the world for the period from 2000 to 2017. It is shown that mainly the impact of changes in oil prices on inflation is carried out through the channel of exchange rate. The paper demonstrates the influence of the transition to inflation targeting on the nature of the relationship between oil price shocks and inflation. This effect is asymmetrical: during periods of rising oil prices, inflation targeting reduces the effect of the transfer of oil prices, limiting negative effects of shock. During periods of decline in oil prices, this monetary policy regime, in contrast, contributes to a stronger transfer, helping to reduce inflation.

Sign in / Sign up

Export Citation Format

Share Document