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A bumpy ride along the Kuznets curve: consumption and income inequality dynamics in Russia

Citation

Gorodnichenko, Yuriy; Peter, Klara Sabirianova; & Stolyarov, Dmitriy (2008). A bumpy ride along the Kuznets curve: consumption and income inequality dynamics in Russia. unpublished paper.

Abstract

We construct key household and individual economic variables using a panel micro data set from the Russia Longitudinal Monitoring Survey (RLMS) for 1994-2005. We analyze cross-sectional income and consumption inequality and find that inequality decreased during the 2000-2005 economic recovery. The decrease appears to be driven by falling volatility of transitory income shocks. The response of consumption to permanent and transitory income shocks becomes weaker later in the sample, consistent with greater self-insurance against permanent shocks and greater smoothing of transitory shocks. Comparisons of RLMS data with official macroeconomic statistics reveal that national accounts may under-estimate the extent of unofficial economic activity, and that the official consumer price index may overstate inflation and be prone to quality bias.

Reference Type

Journal Article

Year Published

2008

Journal Title

unpublished paper

Author(s)

Gorodnichenko, Yuriy
Peter, Klara Sabirianova
Stolyarov, Dmitriy