THE IMPACT OF MONETARY POLICY ON DISTRIBUTION IN UZBEKISTAN AND THE “FELT INFLATION” CONCEPT
Keywords:
felt inflation, monetary policy, headline inflation, heterogeneous inflation, inflation targeting, food inflation, plov index, Central Bank, CPI, Uzbekistan economy.Abstract
This thesis analyzes the distributional effects of monetary policy in Uzbekistan based on the concept of “felt inflation.” The study examines the economic nature of the gap between official headline inflation indicators and inflation perceived by households in real life. It is shown that low-income households experience a higher effective inflation rate than the general CPI due to the high share of food products in their consumption basket. In the case of Uzbekistan, high volatility in food inflation, the liberalization of energy tariffs, and the dynamics of the “plov index” significantly affect inflation expectations of the population. The findings suggest the need to develop income-group-specific inflation indices and to coordinate monetary and fiscal policies in order to improve the effectiveness of monetary policy.
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