Premium
Monetary authority's transparency and income inequality
Author(s) -
Mendonça Helder Ferreira,
Esteves Diogo Martins
Publication year - 2018
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12523
Subject(s) - transparency (behavior) , economics , inequality , economic inequality , database transaction , panel data , empirical evidence , income inequality metrics , comprehensive income , monetary economics , public economics , macroeconomics , econometrics , gross income , political science , mathematical analysis , philosophy , mathematics , epistemology , computer science , law , programming language , state income tax , tax reform
This paper analyzes how transparency from the monetary authority can affect the income inequality. The contribution is twofold. In the first part, we develop a theoretical model that considers heterogenous agent shopping‐time economy with a lack of transaction technology between rich and poor to observe the effect of central bank transparency on income inequality. The second part provides empirical evidence through panel data methodology that draws on 37 developing countries for the period 1992 to 2012. Our findings indicate that, in general, the monetary authority's transparency is an important tool to reduce income inequality between rich and poor when there are some advantages for the first group.