Quality and Quantity
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This paper uses a cross-state panel for the United States over the 1976–2007 period to assess the relationship between income inequality and the inflation rate. Employing a semiparametric instrument variable (IV) estimator, we find that the relationship depends on the level of the inflation rate. A positive relationship occurs only if the states exceed a threshold level of inflation rate. Below this value, inflation rate lowers income inequality. The results suggest that a nonlinear relationship exists between income inequality and the inflation rate. © 2018 Springer Science+Business Media B.V., part of Springer Nature
Income inequality; Inflation rate; Semiparametric instrumental variable estimation
Balcilar, M., Chang, S., Gupta, R. et al. Qual Quant (2018) 52: 2413. https://doi.org/10.1007/s11135-017-0676-3
Miller, S. M.
The Relationship Between The Inflation Rate And Inequality Across U.S. States: A Semiparametric Approach.
Quality and Quantity, 52(5),