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.

Agnello, L., Fazio, G., Sousa, R. (2016). National fiscal consolidations and regional inequality in Europe. CAMBRIDGE JOURNAL OF REGIONS, ECONOMY AND SOCIETY, 9(1), 59-80 [10.1093/cjres/rsv033].

National fiscal consolidations and regional inequality in Europe

AGNELLO, Luca
;
FAZIO, Giorgio
;
2016-01-01

Abstract

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.
2016
Settore SECS-P/02 Politica Economica
Agnello, L., Fazio, G., Sousa, R. (2016). National fiscal consolidations and regional inequality in Europe. CAMBRIDGE JOURNAL OF REGIONS, ECONOMY AND SOCIETY, 9(1), 59-80 [10.1093/cjres/rsv033].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10447/212158
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