Regional income redistribution and stabilization: evidence from China

Mengting Ruan and Xiaolu Zhao

Applied Economics Letters, 2024, vol. 31, issue 2, 113-117

Abstract: We estimate the effect of vertical fiscal flows in China using Bayoumi and Masson method. The results show that vertical fiscal flows have a redistribution effect on regional economy and reduce regional differences for about 30.8%. But there is no evidence shows that fiscal flows automatically stabilize the inter-regional economy. Both effects increase in recent years. Compared with other fiscal-federal countries, China has a stronger redistribution effect and weaker stability effect.

Date: 2024
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DOI: 10.1080/13504851.2022.2128170

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