Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/113346
Authors: 
Figari, Francesco
Paulus, Alari
Sutherland, Holly
Year of Publication: 
2015
Series/Report no.: 
EUROMOD Working Paper EM5/15
Abstract: 
The financial and economic crisis which started in the late 2000s and the fiscal consolidation measures to counter the subsequent government budget deficits have an impact on household income distribution and macroeconomic recovery. We consider the austerity measures in relation to their distributional impact and the potential channels through which fiscal consolidation can affect economic growth. We find notable variation in the size, composition and effects of fiscal consolidation. Richer households tend to bear a greater burden in most countries but spending cuts are more likely to affect liquidity constrained households casting doubts over previous findings in the macro-economic literature about the effectiveness of such measures. This suggests the need to consider more disaggregated evidence to reach robust policy conclusions.
Subjects: 
Austerity measures
European Union
Fiscal consolidation
Income distribution
Microsimulation
JEL: 
D31
H24
H55
I3
Document Type: 
Working Paper

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