Economics Department Working Paper Series
Working Paper Number
2020-05
Publication Date
2020
Abstract
In the aftermath of large devaluations, prices of tradable goods and lower-priced varieties increase significantly more than the prices of nontradables and higher-priced varieties. These relative price changes may lead to inflation inequality when household consumption baskets are different across the distribution of income. Using Cravino and Levchenko [2017]’s methodology, we show that inflation for poor households in Brazil was at least 11 percentage points higher than for rich ones in the aftermath of the 2002 large devaluation. A detailed case study of the City of São Paulo estimates an inflation inequality ranging from 8 to 11 percentage points in the city.
DOI
https://doi.org/10.7275/18219125
License
UMass Amherst Open Access Policy
Recommended Citation
Gouvea, Raphael Rocha, "Large Devaluations and Inflation Inequality: Evidence from Brazil" (2020). UMass Economics Working Papers. 288.
https://doi.org/10.7275/18219125