Browsing by Author "Tejano, Paolo Lorenzo"
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Item Restricted Financial inclusion, the inflation tax, and consumption inequality in the Philippines(2017) Arcilla, Angelo Rafael E. ; Tejano, Paolo Lorenzo ; Mendoza, Maria Nimfa F.High inflation acts as a regressive consumption tax, significantly impacting the poor. Including the poor in the formal financial system can help them weather the effects of high inflation. Financial inclusion allows individuals to augment their nominal money balances by saving and earning on deposits, as well as by taking out loans. Access to formal financial services has the potential to increase the purchasing power of the poor and reduce the inequality of consumption. This study uses panel regression analysis to determine the effects of financial inclusion on the inequality of consumption through the inflation channel. The researchers find that: (1) given low levels of financial inclusion, higher levels of inflation result in higher levels of consumption inequality; (2) given high levels of financial inclusion, higher levels of inflation result in lower levels of consumption inequality; (3) at all levels of inflation, financial inclusion reduces consumption inequality; and (4) at higher levels of inflation, financial inclusion reduces consumption inequality by a larger amount.