Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/227896
Authors: 
Gouvêa, Raphael Rocha
Year of Publication: 
2020
Series/Report no.: 
Working Paper No. 2020-05
Abstract: 
In the aftermath of large devaluations, prices of tradable goods/lower-priced varieties increase significantly more than the prices of nontradables/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 of poor households in Brazil was at least 11 percentage points higher than of the rich 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.
Subjects: 
Exchange Rate Devaluation
Pass-Through
Inflation
Inequality
JEL: 
F31
F41
E31
Document Type: 
Working Paper

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