The Distributional Effects of Fiscal Consolidation

By Laurence Ball, Davide Furceri, D. Leigh, Prakash Loungani. Social Science Research Network, 2013

189 citations recorded by the source corpus.

This paper examines the distributional effects of fiscal consolidation. Using episodes of fiscal consolidation for a sample of 17 OECD countries over the period 1978–2009, we find that fiscal consolidation has typically had significant distributional effects by raising inequality, decreasing wage income shares and increasing long-term unemployment. The evidence also suggests that spending-based adjustments have had, on average, larger distributional effects than tax-based adjustments.

View Paper: https://www.semanticscholar.org/paper/aaf0a872d71eb08c97c42b3b1e21d1d759c7acef

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Citations in the corpus

• The Distributional Impact of Austerity and the Recession in Southern Europe (2014, background): “…Alesina, Favero & Giavazzi 2012) have argued that declines in public spending may lead to stronger economic growth than is the case with tax increases, while others (Jordà & Taylor 2013; Ball et al. 2013) have found that the medium-term relationship of spending cuts with GDP growth is negative.”