Growing (Un)equal : Fiscal Policy and Income Inequality in China and BRIC+ /

This paper investigates the empirical characteristics of income inequality in China and a panel of BRIC+ countries over the period 1980-2013, with a focus on the redistributive contribution of fiscal policy. Using instrumental variable techniques to deal with potential endogeneity, we find evidence...

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Detalhes bibliográficos
Autor principal: Cevik, Serhan
Outros Autores: Correa-Caro, Carolina
Formato: Periódico
Idioma:English
Publicado em: Washington, D.C. : International Monetary Fund, 2015.
Colecção:IMF Working Papers; Working Paper ; No. 2015/068
Acesso em linha:Full text available on IMF
Descrição
Resumo:This paper investigates the empirical characteristics of income inequality in China and a panel of BRIC+ countries over the period 1980-2013, with a focus on the redistributive contribution of fiscal policy. Using instrumental variable techniques to deal with potential endogeneity, we find evidence supporting the hypothesis of the existence of a Kuznets curve-an inverted Ushaped relationship between income inequality and economic development-in China and the panel of BRIC+ countries. In the case of China, the empirical results indicate that government spending and taxation have opposing effects on income inequality. While government spending appears to have a worsening impact, taxation improves income distribution. Even though the redistributive effect of fiscal policy in China appears to be stronger than what we identify in the BRIC+ panel, it is not large enough to compensate for the adverse impact of other influential factors.
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Descrição Física:1 online resource (26 pages)
Formato:Mode of access: Internet
ISSN:1018-5941
Acesso:Electronic access restricted to authorized BRAC University faculty, staff and students