High inflation has been as one of the characteristics of developing countries including Iran and its economic and social impacts are extensive. Compiling policies for economic development requires that inflation impacts on different social classes should be studied carefully. Microeconomic analyses show that because of higher increase in price of goods that have higher share in consumption bundle of the poor comparing to goods that have the main share in rich families budget, and because of the higher use of low income families from fixed income, the inflation is a potential factor that increases income gap in Iran. According to the panel data of provinces in 1380-82, the results suggest that high income families gain from inflation at the expense of low income.
JEL Classification: E31, D31, D63
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