Social Implications of Fiscal Policy Responses During Crises

Carlos Vegh and Guillermo Vuletin

No 19828, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper studies the social implications of fiscal policy responses to crises in Latin America over the last 40 years and in the Eurozone during the aftermath of the global financial crisis. We focus on the behavior of four social indicators: the poverty rate, income inequality, unemployment rate, and domestic conflict. We find a causal link from counteryclical (procyclical) fiscal policy responses to reductions (increases) in all four social indicators. These results call into question recent claims on "expansionary fiscal austerity."

JEL-codes: E62 F41 (search for similar items in EconPapers)
Date: 2014-01
New Economics Papers: this item is included in nep-mac and nep-opm
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Citations: View citations in EconPapers (19)

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