Austerity, Inequality, and Private Debt Overhang

Mathias Klein and Roland Winkler ()

VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association

Abstract: We show that the distributional consequences of fiscal consolidations depend significantly on the level of private indebtedness. Austerity leads to a strong and persistent increase in income inequality when private debt is high. In contrast, there are no discernible distributional effects when private debt is low. This result is robust to alternative identifications of consolidations, to different ways of defining high and low debt states, and to controlling for the state of the business cycle.

JEL-codes: D63 E62 E64 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-cta and nep-mac
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Citations: View citations in EconPapers (30)

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Related works:
Journal Article: Austerity, inequality, and private debt overhang (2019)
Working Paper: Austerity, Inequality, and Private Debt Overhang (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc17:168076

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