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http://hdl.handle.net/10419/64492
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| Title: | | Income inequality, tax base and sovereign spreads  |
| Authors: | | Aizenman, Joshua Jinjarak, Yothin |
| Issue Date: | | 2012 |
| Series/Report no.: | | Working Papers, UC Santa Cruz Economics Department 700 |
| 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 |
| Appears in Collections: | | Working Papers, Economics Department, UC Santa Cruz
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