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Exchange rate pass-through to import prices in South Africa: Is there asymmetry?

T D Karoro, M J Aziakpono & N Cattaneo
Publication date
July 2008
We examine the impact of financial development on earnings inequality in Brazil in the 1980s and first half of the 1990s. The evidence - based on panel time-series data and analysis - shows that financial development had a significant and robust effect in reducing inequality during the period. We suggest that this is not only because the poorer can invest the acquired credit in either short or long-term productive activities, but also because those with access to financial markets can insulate themselves, via a process of financial adaptation, against recurrent poor macroeconomic performance, which is exemplified in Brazil by high rates of inflation. The main implication of the results is that a deeper and more active financial sector alleviates the high inequality seen in Brazil without the need for distortionary taxation.
Publication PDF
Series title
Working Paper 086
2008, The Developing Economies, 47 (1), 30-52