Fiscal adjustments and income inequality: a first assessment

Luca Agnello · Ricardo Magalhaes Sousa

89 citations0/0 files storedApplied Economics Letters

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Fiscal Policies and Political Economy Income, Poverty, and Inequality Economic Theory and Policy

Abstract

Using a statistical approach to identify fiscal adjustments, we find that fiscal consolidation appears to shorten the income gap. Fiscal austerity plans that succeed in bringing public debt to a sustainable path seem to be more likely to reduce inequality. Expansionary fiscal adjustments are particularly important to promote changes in the income distribution.

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2010The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks 2011From Financial Crash to Debt Crisis 1990Can Severe Fiscal Contractions Be Expansionary? Tales of Two Small European Countries 2009Large Changes in Fiscal Policy: Taxes Versus Spending 1998Tales of fiscal adjustment 1982Government deficits and aggregate demand 2013Macroeconomic determinants of the credit risk in the banking system: The case of the GIPSI 2007What Promotes Fiscal Consolidation: OECD Country Experiences

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