large devaluations and inflation inequality: replicating cravino and levchenko (2017) with evidence from brazil (replication data)

In the aftermath of large devaluations, prices of tradable goods/lower-priced varieties increase significantly more than the prices of nontradables/higher-priced varieties. These relative price changes may lead to inflation inequality when household consumption baskets are different across the distribution of income. Using Cravino and Levchenko's (2017, methodology, we show that inflation of poor households in Brazil was at least 11 percentage points higher than that of the rich in the aftermath of the 2002 large devaluation. A detailed case study of the City of S-o Paulo estimates an inflation inequality ranging from 8 to 11 percentage points in the city.

Data and Resources

Suggested Citation

Gouvêa, Raphael (2022): Large devaluations and inflation inequality: Replicating Cravino and Levchenko (2017) with evidence from Brazil (replication data). Version: 1. Journal of Applied Econometrics. Dataset.