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Economic uncertainty and the redistributive effect of taxes and transfers in the UK and the US since the 1980s

Author

Listed:
  • Oscar Claveria

    (AQR-IREA, University of Barcelona)

  • Petar Sorić

    (University of Zagreb)

Abstract

This study examines the relationship between economic uncertainty and the redistributive effect of taxes and government transfers in the UK and the US over the period 1980-2021. We find that the sign of the relationship between uncertainty and redistribution goes from being negative at the beginning of the 1980s to taking a positive and significant sign in recent years. In the US, economic uncertainty Granger-causes the redistributive effect of taxes and transfers in the short run, but the same does not hold for the UK. We also find an asymmetric adjustment, being the impact of decreases in economic uncertainty on redistribution greater than that of increases.

Suggested Citation

  • Oscar Claveria & Petar Sorić, 2025. "Economic uncertainty and the redistributive effect of taxes and transfers in the UK and the US since the 1980s," Economics Bulletin, AccessEcon, vol. 45(1), pages 130-137.
    • Handle: RePEc:ebl:ecbull:eb-24-00216
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    File URL: http://www.accessecon.com/Pubs/EB/2025/Volume45/EB-25-V45-I1-P13.pdf
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    More about this item

    Keywords

    economic uncertainty; redistributive policy; taxes; government transfers; income inequality; asymmetric adjustment;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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