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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Bibliographic Details
Main Author: Cevik, Serhan
Other Authors: Correa-Caro, Carolina
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 2015.
Series:IMF Working Papers; Working Paper ; No. 2015/068
Online Access:Full text available on IMF
Description
Summary: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.
Item Description:<strong>Off-Campus Access:</strong> No User ID or Password Required
<strong>On-Campus Access:</strong> No User ID or Password Required
Physical Description:1 online resource (26 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Access:Electronic access restricted to authorized BRAC University faculty, staff and students