Fiscal consolidations and income inequality: Evaluating the evidence

Panagiotis Th. Konstantinou

The Quarterly Review of Economics and Finance, 2024, vol. 97, issue C

Abstract: What are the effects of fiscal austerity on income inequality? In this paper I estimate the average treatment effect (ATE) of fiscal consolidations quantifying their dynamic impact by means of dose–response functions. Dose–response functions allow the ATEs to vary by the levels of treatment. I find that austerity indeed increases income inequality, however the increases manifest themselves whenever unannounced fiscal measures are relatively low, lower that 0.20% of GDP or relatively high, higher than 2.17% of GDP. For intermediate levels of fiscal measures income inequality does not change. These results hold for various measures of income inequality.

Keywords: Fiscal austerity; Income inequality; Dose-response function (search for similar items in EconPapers)
JEL-codes: D63 E62 H62 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1062976924000863
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:97:y:2024:i:c:s1062976924000863

DOI: 10.1016/j.qref.2024.101880

Access Statistics for this article

The Quarterly Review of Economics and Finance is currently edited by R. J. Arnould and J. E. Finnerty

More articles in The Quarterly Review of Economics and Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().