Please use this identifier to cite or link to this item:
https://hdl.handle.net/1822/14588
Title: | Fiscal consolidation and income inequality |
Author(s): | Agnello, Luca Sousa, Ricardo M. |
Keywords: | Fiscal consolidation Income inequality Kuznets curve |
Issue date: | 2011 |
Publisher: | Universidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE) |
Abstract(s): | In this paper, we assess the impact of fiscal consolidation on income inequality. Using a panel of 18 industrialized countries from 1970 to 2010, we find that income inequality significantly rises both during periods of fiscal consolidation and in the aftermath of such adjustments. In addition, fiscal authority that is driven by spending cuts seems to be more detrimental for income distribution than in the case of tax hikes. Considering the linkages between banking crises and fiscal consolidation, we show that the impact on the income gap is amplified when fiscal adjustments take place after the resolution of such financial turmoils. Our results also provide support for the Kuznets relationship and corroborate the idea that trade can lead to a more unequal distribution of income. |
Type: | Working paper |
URI: | https://hdl.handle.net/1822/14588 |
Publisher version: | http://www.eeg.uminho.pt/economia/nipe |
Peer-Reviewed: | no |
Access: | Open access |
Appears in Collections: | NIPE - Documentos de Trabalho |
Files in This Item:
File | Description | Size | Format | |
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NIPE_WP_34_2011.pdf | Documento principal | 678,68 kB | Adobe PDF | View/Open |