6533b871fe1ef96bd12d23fe
RESEARCH PRODUCT
National fiscal consolidations and regional inequality in Europe
Luca AgnelloRicardo M. SousaRicardo M. SousaGiorgio Faziosubject
MacroeconomicsEconomics and EconometricEconomics and EconometricsSociology and Political ScienceInequalitymedia_common.quotation_subjectGeography Planning and Development0211 other engineering and technologies02 engineering and technologyfiscal consolidationregional inequalityConsolidation (business)Economic inequality0502 economics and businessDevelopment economicsEconomics050207 economicsmedia_commonGovernment spending05 social sciences1. No povertySettore SECS-P/02 Politica Economica021107 urban & regional planningR1Fiscal unionEuropean policyEurope JEL Classifications: D638. Economic growthE62E64description
Using annual data for 13 European countries over the period 1980-2008, we assess the impact of national fiscal consolidations on the income inequality of European regions. Regional dispersion increases in the outcome of consolidation episodes, particularly, when packages are more severe and implemented through spending cuts rather than tax rises. From a policy perspective, these findings suggest that fiscal consolidations driven by reductions in government spending can exacerbate regional disparities and may ultimately counteract the European policy efforts to promote territorial cohesion. Our results are robust to alternative inequality measures, the occurrence of crisis episodes and the exclusion of fiscal outliers.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2016-01-29 | Cambridge Journal of Regions, Economy and Society |