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Monetary policy, inflation, and income inequality in developing countries

Ayoub Rabhi & B. Parsons

Economics and Sociology2025https://doi.org/10.14254/2071-789x.2025/18-2/1article
AJG 1
Weight
0.52

What the paper says

This study investigates the relationship between income inequality and monetary policy in developing countries using a balanced panel dataset of 25 countries from 2000 and 2022. The analysis explores how contractionary and expansionary monetary policies, along with inflation, influence income distribution. The findings reveal that both contractionary and expansionary monetary policies have an effect on income inequality. The study emphasizes the adverse impact of high interest rates on lower and middle-income groups, as it widens income inequality and benefits the top income group. Similarly, high inflation erodes income shares for most deciles but the wealthiest, who can leverage asset appreciation and price-setting power. Additionally, the study highlights the redistributive role of government spending and public investments, which positively impact income shares across all deciles except the top 10%.

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https://doi.org/https://doi.org/10.14254/2071-789x.2025/18-2/1

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@article{ayoub2025,
  title        = {{Monetary policy, inflation, and income inequality in developing countries}},
  author       = {Ayoub Rabhi & B. Parsons},
  journal      = {Economics and Sociology},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.14254/2071-789x.2025/18-2/1},
}

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Monetary policy, inflation, and income inequality in developing countries

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Evidence weight

0.52

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.47 × 0.4 = 0.19
M · momentum0.68 × 0.15 = 0.10
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.