Abstract
Persistent inflation represents a challenge for social welfare and the reduction of inequalities in Latin America. The objective of this study was to analyze the relationship between welfare, inequality, and persistent inflation during the period 2000--2024 through the construction of an Inflation-Vulnerable Welfare Model (IVWM). A quantitative study with a longitudinal design was developed, based on panel data from sixteen Latin American countries. The IVWM was constructed using Principal Component Analysis, and subsequently an Arellano-Bond dynamic GMM model was applied, complemented with Monte Carlo simulations. The results showed that inflation persistence exerts a negative and significant effect on regional welfare, while social spending, public investment, and employment contribute positively to its strengthening. It is concluded that price stability constitutes a fundamental factor for the sustainability of welfare and the reduction of inequalities in the region.
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