| Description |
1 online resource (37 pages) |
| Series |
IMF working paper ; WP/13/195 |
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IMF working paper ; WP/13/195.
|
| Contents |
Cover; Contents; I. Introduction; II. Data, Trends In Income Distribution, and Related Studies; Box; 1. Fiscal Policy and Inequality: Survey of Evidence; III. Econometric Analysis: Fiscal Consolidation, Fiscal Policy, and Inequality; IV. Case Study of Fiscal Consolidation Episodes; V. Concluding Remarks; Figures; 1. Selected European Economies: Change in; 2. Trends in Disposable Income Inequality: Gini Coefficient, 1985-2010; 3. Ratio of Direct to Indirect Taxes and Social Benefits Spending, 1980-2009; 4. Dynamic Effects of Fiscal Consolidation on Income |
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5. Changes in Income Inequality: Spending-Based versus Tax-BasedTables; 1. Pairwise Correlation of Measures of Income Distribution and Unemployment, 1980-2010; 2. Impact on Disposable Income Gini Coefficient of Fiscal Consolidation: OECD Countries, 1978-2009; 3. Determinants of Income Inequality, 1980-2010; Appendixes; 1. Description of Data and List of Sample Countries; Appendix Tables; 1. Level of Initial Government Debt, Growth, and Investment, 1970-2007; 2. Cross-country Regression-Government Debt and Real per capita GDP Growth; References |
| Summary |
The 2007-09 Great Recession has led to an unprecedented increase in public debt in many countries, triggering substantial fiscal adjustments. What are the distributional consequences of fiscal austerity measures? This is an important policy question. This paper analyzes the effects of fiscal policies on income inequality in a panel of advanced and emerging market economies over the last three decades, complemented by a case study of selected consolidation episodes. The paper shows that fiscal consolidations are likely to raise inequality through various channels including their effects on unemployment. Spending-based consolidations tend to worsen inequality more significantly, relative to tax-based consolidations. The composition of austerity measures also matters: progressive taxation and targeted social benefits and subsidies introduced in the context of a broader decline in spending can help offset some of the adverse distributional impact of consolidation. In addition, fiscal policy can favorably influence long-term trends in both inequality and growth by promoting education and training among low- and middle-income workers |
| Bibliography |
Includes bibliographical references |
| Subject |
Fiscal policy.
|
|
Fiscal policy
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| Form |
Electronic book
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| Author |
Bova, Elva
|
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Kinda, Tidiane
|
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Zhang, Yuanyan Sophia
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| ISBN |
1484311531 |
|
9781484311530 |
|
9781475536300 |
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1475536305 |
|
