Abstract
Evidence reveals that consumption inequality rises significantly to positive income inequality shocks. A counterfactual VAR analysis indicates that high inflation amplifies the increase in consumption inequality to positive income inequality shocks when inflation exceeds the 6 % threshold. In addition, evidence reveals that low inflation dampens the increase in consumption inequality when inflation is below the 6 % threshold. This evidence reveals that price stability matters. Therefore, policymakers should enforce price stability to weaken the link between the income inequality and consumption inequality.
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Ndou, E., Mokoena, T. (2019). Does Price Stability Impact the Link Between Income Inequality and Consumption Inequality?. In: Inequality, Output-Inflation Trade-Off and Economic Policy Uncertainty . Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-19803-9_11
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DOI: https://doi.org/10.1007/978-3-030-19803-9_11
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Publisher Name: Palgrave Macmillan, Cham
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Online ISBN: 978-3-030-19803-9
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