{"title":"Do fiscal rules breed inequality? First evidence for the EU","authors":"Jochen Hartwig, J. Sturm","doi":"10.3929/ETHZ-B-000396308","DOIUrl":null,"url":null,"abstract":"Research into the effects of fiscal rules has so far focused on their budgetary impact. Possible unwanted side effects of having fiscal rules have gone largely unexplored. This is unfortunate since such side effects are highly probable. For instance, governments attempting to abide by a fiscal rule might curb social expenditure; and this could lead to a higher level of income inequality. We test this hypothesis with data from the Standardized World Income Inequality Database (SWIID) and a new set of fiscal rules dummy variables for EU countries. We find that after 'hard' rules, i.e. rules that are reinforced by sanctions and/or automatic correction mechanisms, have been in place for several years, the amount of redistribution in a country declines, leading to an increase in inequality based on disposable income measures.","PeriodicalId":47355,"journal":{"name":"Economics Bulletin","volume":null,"pages":null},"PeriodicalIF":0.6000,"publicationDate":"2019-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"3","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Economics Bulletin","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.3929/ETHZ-B-000396308","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"Economics, Econometrics and Finance","Score":null,"Total":0}
引用次数: 3
Abstract
Research into the effects of fiscal rules has so far focused on their budgetary impact. Possible unwanted side effects of having fiscal rules have gone largely unexplored. This is unfortunate since such side effects are highly probable. For instance, governments attempting to abide by a fiscal rule might curb social expenditure; and this could lead to a higher level of income inequality. We test this hypothesis with data from the Standardized World Income Inequality Database (SWIID) and a new set of fiscal rules dummy variables for EU countries. We find that after 'hard' rules, i.e. rules that are reinforced by sanctions and/or automatic correction mechanisms, have been in place for several years, the amount of redistribution in a country declines, leading to an increase in inequality based on disposable income measures.
期刊介绍：
The Economic Bulletin is an open-access letters journal founded in 2001 with the mission of providing free and extremely rapid scientific communication across the entire community of research economists. EB publishes original notes, comments, and preliminary results. We are especially interested in publishingmanuscripts that keep the profession informed about on-going research programs. Our publication standard is that a manuscript be original, correct and of interest to a specialist. Submissions in these categories are refereed and our objective is to make a decision within two months. Accepted papers are published immediately. It is expected that in many cases, manuscripts published in these categories will form the foundation for more complete works to besubsequently submitted to other journals. In all cases, submissions are restricted to seven printed pages exclusive of references, tables, figures, and appendices, and must be in PDF format. EB also publishes non-refereed letters to the editor, conference announcements and research announcements.
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