Investigating the Nonlinear Effects of Inflation Tax on Income Distribution Inequality: NARDL Approach

The distributional consequences of inflation have played a large role in the theories of growth and inequality and have always been discussed and studied. In recent years, with the distributional consequences of monetary policies becoming more prominent, understanding the relationship between inflation and income distribution inequality has become a very important policy priority. A very important variable in recent years, especially in developing countries that suffer from high inflation rates, is the inflation tax, which leads to a decrease in the purchasing power of individuals and businesses in favor of the government. Inflation tax is the amount of wealth of businesses and households that is transferred to the government as a result of inflation. Considering this issue, the aim of this study is to investigate the nonlinear effects of inflation tax on the inequality of income distribution in Iran with the Non-Linear ARDL (NARDL) approach during the period of 1981 to 2021. The results of this study showed that the inflation tax had positive effects on the inequality of income distribution in Iran. Also, based on other results of this study, the effects were non-linear. In other words, the effect of the inflation tax on the inequality of income distribution follows a non-linear pattern.

The distributional consequences of inflation have played a large role in the theories of growth and inequality and have always been discussed and studied. In recent years, with the distributional consequences of monetary policies becoming more prominent, understanding the relationship between inflation and income distribution inequality has become a very important policy priority. A very important variable in recent years, especially in developing countries that suffer from high inflation rates, is the inflation tax, which leads to a decrease in the purchasing power of individuals and businesses in favor of the government. Inflation tax is the amount of wealth of businesses and households that is transferred to the government as a result of inflation. Considering this issue, the aim of this study is to investigate the nonlinear effects of inflation tax on the inequality of income distribution in Iran with the Non-Linear ARDL (NARDL) approach during the period of 1981 to 2021. The results of this study showed that the inflation tax had positive effects on the inequality of income distribution in Iran. Also, based on other results of this study, the effects were non-linear. In other words, the effect of the inflation tax on the inequality of income distribution follows a non-linear pattern.



The distributional consequences of inflation have played a large role in the theories of growth and inequality and have always been discussed and studied. In recent years, with the distributional consequences of monetary policies becoming more prominent, understanding the relationship between inflation and income distribution inequality has become a very important policy priority. A very important variable in recent years, especially in developing countries that suffer from high inflation rates, is the inflation tax, which leads to a decrease in the purchasing power of individuals and businesses in favor of the government. Inflation tax is the amount of wealth of businesses and households that is transferred to the government as a result of inflation. Considering this issue, the aim of this study is to investigate the nonlinear effects of inflation tax on the inequality of income distribution in Iran with the Non-Linear ARDL (NARDL) approach during the period of 1981 to 2021. The results of this study showed that the inflation tax had positive effects on the inequality of income distribution in Iran. Also, based on other results of this study, the effects were non-linear. In other words, the effect of the inflation tax on the inequality of income distribution follows a non-linear pattern.



The distributional consequences of inflation have played a large role in the theories of growth and inequality and have always been discussed and studied. In recent years, with the distributional consequences of monetary policies becoming more prominent, understanding the relationship between inflation and income distribution inequality has become a very important policy priority. A very important variable in recent years, especially in developing countries that suffer from high inflation rates, is the inflation tax, which leads to a decrease in the purchasing power of individuals and businesses in favor of the government. Inflation tax is the amount of wealth of businesses and households that is transferred to the government as a result of inflation. Considering this issue, the aim of this study is to investigate the nonlinear effects of inflation tax on the inequality of income distribution in Iran with the Non-Linear ARDL (NARDL) approach during the period of 1981 to 2021. The results of this study showed that the inflation tax had positive effects on the inequality of income distribution in Iran. Also, based on other results of this study, the effects were non-linear. In other words, the effect of the inflation tax on the inequality of income distribution follows a non-linear pattern.