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http://hdl.handle.net/10419/64522
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| Title: | | Income inequality, tax base and sovereign spreads  |
| Authors: | | Aizenman, Joshua Jinjarak, Yothin |
| Issue Date: | | 2011 |
| Series/Report no.: | | Working Papers, UC Santa Cruz Economics Department 691 |
| Abstract: | | This note investigates the impact of greater income inequality on the tax base, on the defacto fiscal space, and the sovereign spreads. Using data from 50 countries in 2005 and in 2010, 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: a one standard deviation increase of inequality is associated with a lower tax base of 28 % GDP, and with a higher sovereign spread of 240 basis points in 2005. |
| Subjects: | | income inequality tax-base fiscal space sovereign spreads |
| JEL: | | H20 H30 H63 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Working Papers, Economics Department, UC Santa Cruz
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