Fiscal risk sharing and redistribution between Austrian states

Lukas Reiss ()
Additional contact information
Lukas Reiss: Oesterreichische Nationalbank

Empirica, 2022, vol. 49, issue 1, No 1, 20 pages

Abstract: Abstract The recession of 2012/13 in the euro area has led to various suggestions on how to increase fiscal risk sharing between member states, preferably without much permanent redistribution. In this context, we analyse the extent of fiscal risk sharing and redistribution between Austrian states from 2000 to 2019. Overall, fiscal policy smooths about one tenth of regional GDP shocks. This is similar to the magnitude observed in other federal countries. The main contributors to fiscal risk sharing are the federal budget and social security funds. However, the revenue sharing scheme between the federal government and subnational governments plays an important role, too. This system also shows how risk sharing can be achieved without much redistribution. This desirable feature is due to mechanisms which explicitly benefit high-income states. At the same time, other parts of the Austrian fiscal system induce less fiscal risk sharing, but have a much larger redistributive impact between states. Furthermore, while the overall Austrian fiscal system is highly redistributive between states, net contributions vary substantially over time.

Keywords: Risk sharing; Fiscal federalism; Regional accounts (search for similar items in EconPapers)
JEL-codes: H77 R10 R50 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10663-021-09525-6 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:kap:empiri:v:49:y:2022:i:1:d:10.1007_s10663-021-09525-6

Ordering information: This journal article can be ordered from
http://www.springer. ... ration/journal/10663

DOI: 10.1007/s10663-021-09525-6

Access Statistics for this article

Empirica is currently edited by Fritz Breuss and Fritz Breuss

More articles in Empirica from Springer, Austrian Institute for Economic Research, Austrian Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().