Analyzing the Impact of Fiscal Policy (Income Tax) on Income Distribution in Iran by Autoregressive Distributed Lag (ARDL) Approach

Hassan Mollaesmaeili Dehshiri (), Jamshid Pajouyan (), Shamseddin Hosseini () and Farhad Ghaffari ()
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Hassan Mollaesmaeili Dehshiri: Department of Management and Economics, Science and Research Branch, Islamic Azad University
Jamshid Pajouyan: Department of Management and Economics, Science and Research Branch, Islamic Azad University
Shamseddin Hosseini: Department of Economics, Allameh Tabataba'i University
Farhad Ghaffari: Department of Management and Economics, Science and Research Branch, Islamic Azad University

Journal of Money and Economy, 2020, vol. 15, issue 2, 221-234

Abstract: Economic justice and equitable distribution of income, along with important issues such as economic growth and development, the reduction of inflation and unemployment, have always been of concern to economists. Fair distribution of income and reduction of income inequality in society, and the identification of factors affecting income inequality to make the right policy are necessary and obvious. The purpose of this paper is to examine the impact of income tax on income distribution in Iran. In this regard, Autoregressive Distributed Lag (ARDL) approach has been used to investigate the existence of a long-run relationship between variables and to estimate the coefficients related to long-run and error correction models for income inequality from 1978 to 2012. The results indicate a long-run relationship among the variables and show that an increase in income tax revenues leads to a reduction in income inequality.

Keywords: Income Distribution; Gini Coefficient; Income Tax; ARDL. (search for similar items in EconPapers)
JEL-codes: E62 G28 G38 (search for similar items in EconPapers)
Date: 2020
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