Effects of inflation on wealth distribution: Do stock market participation fees and capital income taxation matter?

Heer, Burkhard; Süßmuth, Bernd

doi:10.1016/j.jedc.2005.11.003

Cited by 32 publications

(18 citation statements)

References 39 publications

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“…25 The analysis here ignores other behavioral responses, like shifting jobs to the informal sector. 26 For example, Neudeck (1981) and Heer and Sussmuth (2007).…”

Section: Discussionmentioning

confidence: 99%

Simulating the impact of inflation on the progressivity of personal income tax in Brazil

Levy¹,

Nogueira²,

Siqueira³

et al. 2010

Rev. Bras. Econ.

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Income tax reform in Brazil has mainly stressed changes in rates, aiming at increasing its progressivity. One aspect frequently overlooked is that, in the absence of adjustments of the tax rules to inflation, the level and distribution of the income tax burden can be substantially affected. We use a microsimulation model to simulate the potential revenue and distributive effects of inflation on the income tax in Brazil. Our findings suggest that if the income tax is not adjusted for inflation, progressivity would decrease but redistribution would increase due to a larger tax burden, but income inequality would not substantially change.
No Brasil, reformas do imposto de renda têm enfatizado mudanças nas alíquotas, objetivando o aumento de sua progressividade. Um aspecto frequentemente desconsiderado é que, na ausência de ajustamentos das regras do imposto em relação à inflação, o nível e distribuição da carga do imposto podem ser substancialmente afetados. Utilizamos um modelo de microssimulação para estimar os potenciais efeitos distributivos e arrecadatórios da inflação sobre o imposto de renda no Brasil. Os resultados sugerem que não ajustando o imposto de renda de acordo com a inflação, sua progressividade diminui e seu efeito distributivo aumenta. Entretanto, a desigualdade de renda não muda significativamente

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“…25 The analysis here ignores other behavioral responses, like shifting jobs to the informal sector. 26 For example, Neudeck (1981) and Heer and Sussmuth (2007).…”

Section: Discussionmentioning

confidence: 99%

Simulating the impact of inflation on the progressivity of personal income tax in Brazil

Levy¹,

Nogueira²,

Siqueira³

et al. 2010

Rev. Bras. Econ.

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“…As mentioned previously, studies that are closely related to our work are, among others, Chatterjee and Corbae (1992), Alvarez et al (2002), and Heer and Süssmuth (2007). These papers also rely on a portfolio adjustment cost to generate non-trivial money demand.…”

Section: Introductionmentioning

confidence: 73%

Inflation, Financial Developments, and Wealth Distribution

Ho²

2016

IMF Working Papers

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We find that from 1995 to 2002 in China, the dispersion of wealth decreased, the moneywealth ratio increased for all wealth levels and the aggregate money-output ratio increased. We develop a two-asset dynamic general equilibrium model in which households face a portfolio adjustment cost and a borrowing constraint. We find that financial development lowers the dispersion of wealth by reducing the precautionary motive of households. In addition, tight monetary policies increase the value of money and thus increase the moneywealth ratio for all wealth levels and the aggregate money-output ratio. JEL Classification Numbers: D3, O1, O2

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“…In addition, both unexpected as well as expected inflation generates costs for society (Han 2004 ), including menu costs, shoe-leather costs and welfare costs, among others (Chiu and Molico 2010 ; Lee 2013 ; Nakata 2014 ). In fact, almost any cost is the definite result of a constantly increasing general price level that may lead to low efficiency in the economy in general (Heer and Sussmuth 2007 ; Bick 2010 ; Schneider 2014 ). Therefore, in this paper, we do not focus on the inflation cost itself but consider inflation (a constant increase of the general price level) as a comprehensive policy cost, which means that achieving energy savings by increasing energy prices is bound to create an inflation cost in practice.…”

Section: Theoretical Framework and Model Constructionmentioning

confidence: 99%

The impact of relative energy prices on industrial energy consumption in China: a consideration of inflation costs

Ding

Yin

et al. 2016

SpringerPlus

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Significant effort has been exerted on the study of economic variables such as absolute energy prices to understand energy consumption and economic growth. However, this approach ignores general inflation effects, whereby the prices of baskets of goods may rise or fall at different rates from those of energy prices. Thus, it may be the relative energy price, not the absolute energy price, that has most important effects on energy consumption. To test this hypothesis, we introduce a new explanatory variable, the domestic relative energy price, which we define as “the ratio of domestic energy prices to the general price level of an economy,” and we test the explanatory power of this new variable. Thus, this paper explores the relationship between relative energy prices and energy consumption in China from the perspective of inflation costs over the period from 1988 to 2012. The direct, regulatory and time-varying effects are captured using methods such as ridge regression and the state-space model. The direct impacts of relative energy prices on total energy consumption and intensity are −0.337 and −0.250, respectively; the effects of comprehensive regulation on energy consumption through the economic structure and the energy structure are −0.144 and −0.148, respectively; and the depressing and upward effects of rising and falling energy prices on energy consumption are 0.3520 and 0.3564, respectively. When economic growth and the energy price level were stable, inflation persisted; thus, rising energy prices benefitted both the economy and the environment. Our analysis is important for policy makers to establish effective energy-pricing policies that ensure both energy conservation and the stability of the pricing system.

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Effects of inflation on wealth distribution: Do stock market participation fees and capital income taxation matter?

Cited by 32 publications

References 39 publications

Simulating the impact of inflation on the progressivity of personal income tax in Brazil

Simulating the impact of inflation on the progressivity of personal income tax in Brazil

Inflation, Financial Developments, and Wealth Distribution

The impact of relative energy prices on industrial energy consumption in China: a consideration of inflation costs

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