Does increasing Inflation lead to income inequality in Thailand and south-east Asia?

Abstract

Increasing income inequality has negative effects on human well-being and the nation's economic development. Understanding how income inequality is affected by various economic factors is the first step toward alleviating it. Previously, inflation, economic and technology development, and the openness to globalization have been suggested to affect income inequality in various developed nations. In this work, we are interested in developing countries in south-east asia. In Thailand, we found that the inflation rate had a positive impact on income inequality in recent years (2000-2020), yet had the opposite impact in earlier years (1980-1999). On the other hand, we found the negative impact of the business cycle on inequality in south-east asia countries as a whole in earlier years. The opposite (positive) impact was found instead in the OECD countries during the same period. Only openness to international trade was a common significant positive factor between both regions of countries. This work suggests that empirical study of this kind is specific to the countries and periods of study. Generalizations made from the findings may not be warranted.