The Review and Analysis of Changes on Inequality of Income Distribution and Its Impact on Rate of Inflation in Iran

Inflation and income distribution are de facto appraised as two key variables in the economy and till now, many studies have been administered to estimate the plausible relations between these variables in toto.
In this paper, an attempt is made to investigate the hypothetical intrinsic propinquity among inflation rate and income distribution viz-a-viz social welfare function. Although, one should note that the social welfare function which is usually used for assessment of inflation rate is neutral with respect to income distribution variable thereto. Hence, I have tried to examine the inflation rate, through utilizing two various social welfare functions, which per se are not neutral with respect to income distribution, de jure. In this context the first function under the study is Atkinson Social Welfare Function, where the Democratic and Plutocratic Consumer Price Indices are treated as special forms, derived from this function. The other function which I have measured is known as Interdependent Social Welfare Function, propounded by Kakwani. However, in consonance with this formula, one may analyze the impact of income distribution on inflation in more meticulous manner Sine qua non.
Thus, the results prima facie indicate that, the poor people have comparatively inflicted more than the non poor people from the menace of percussion of inflation during the pre sample period of 2011-2012, while the same results are not applicable to the post sample period of 2011-2012, Sui generis.