Abstract
SummaryIn 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's (2017, https://doi.org/10.1257/aer.20151551) methodology, we show that inflation of poor households in Brazil was at least 11 percentage points higher than that 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.
Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
