Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/64492 
Year of Publication: 
2012
Series/Report no.: 
Working Paper No. 700
Publisher: 
University of California, Economics Department, Santa Cruz, CA
Abstract: 
This paper investigates the association between greater income inequality, de-facto fiscal space, and sovereign spreads. Using data from 50 countries in 2007, in 2009 and in 2011, we find that higher income inequality is associated with a lower tax base, lower de-facto fiscal space, and higher sovereign spreads. The economic magnitude of these effects is rather large: an increase in the Gini coefficient of inequality by 1 (in a scale of 0-100), is associated in 2011 with a lower tax base of 2 percent of the GDP, and with a higher sovereign spread of 45 basis points.
Subjects: 
income inequality
tax-base
fiscal space
sovereign spreads
JEL: 
H20
D63
F41
Document Type: 
Working Paper

Files in This Item:
File
Size
261.16 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.