Effects of inflation on the distribution of income in Italy, 1953-1962

Abstract

Article originally published in Banca Nazionale del Lavoro Quarterly Review, vol. 16 n. 67, December 1963, pp. 411-420. In the ten years 1953-62, the average price level in Italy rose every year, with the exception of 1959. The present article examines the effects of this inflationary process on income distribution. To do so the author first determines the extent to which each productive sector contributed to the creation of the total surplus of money product over real product, and how such excess was distributed amongst the various income categories in each sector. Then, the losses in real purchasing power these categories suffered are examined. Finally, the net outcome between gains in money product and losses for each category is found. According to the author, the data suggests peculiarly Ricardian features: the increase in prices was largely due to a rise in rents and of sectoral incomes in which are hidden some forms of rent, in the twofold aspect of privileged positions and inefficiency.

JEL Codes: P24, E25, B31