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Regional income redistribution and stabilization: evidence from China

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  • Mengting Ruan
  • Xiaolu Zhao

Abstract

We estimate the effect of vertical fiscal flows in China using Bayoumi and Masson method. The results show that vertical fiscal flows have a redistribution effect on regional economy and reduce regional differences for about 30.8%. But there is no evidence shows that fiscal flows automatically stabilize the inter-regional economy. Both effects increase in recent years. Compared with other fiscal-federal countries, China has a stronger redistribution effect and weaker stability effect.

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  • Mengting Ruan & Xiaolu Zhao, 2024. "Regional income redistribution and stabilization: evidence from China," Applied Economics Letters, Taylor & Francis Journals, vol. 31(2), pages 113-117, January.
    • Handle: RePEc:taf:apeclt:v:31:y:2024:i:2:p:113-117
    DOI: 10.1080/13504851.2022.2128170
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