Abstract:

Although the inequalities in income distribution and the factors affecting them have been examined by many researchers, the effect of inflation on income distribution has still been one of the controversial issues. For this reason, in this study, the effect of inflation on income distribution was tried to be investigated. While the main variable is inflation, other additional variables have been added to the research. These added variables are economic growth, unemployment, foreign trade, public expenditures and population. 19 developing countries were included in the study. These countries were selected from the countries in the upper-middle and lower-middle income groups in the World Bank classifications. The analysis was carried out using the data of the countries between 1990 and 2017. According to the results of the study, a unit increase in inflation rates in this developing country group increases the Gini Coefficient used in determining income distribution injustice by 0.0000076. In other words, the increase in inflation in developed countries disrupts the justice of income distribution. Considering the effects of other variables added to the study; a unit increase in per capita income, which represents economic growth, reduces the Gini coefficient by 0.0000044. In other words, it improves the income distribution justice. A unit increase in public expenditures increases the Gini Coefficient by 0.020. In other words, it distorts the income distribution justice. In addition, unemployment rates, trade openness and population growth rate did not have a significant effect on income inequality.

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