IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Long Term Effects of Fiscal Policy on the Size and the Distribution of the Pie in the UK

  • Xavier Ramos
  • Oriol Roca-Sagales

This paper provides a joint analysis of the output and distributional long term effects of various fiscal policies in the UK, using a Vector Autoregression approach. Our findings suggest that the output effects of fiscal policies are consistent with the Keynesian paradigm for both direct and indirect taxes but not for public spending. The estimated long term impact on GDP of increasing all type of expenditure and taxes analysed is negative and especially strong in the case of current expenditure. We also find significant distributional effects associated to fiscal policies, indicating that an increase in public spending and direct taxes reduces inequality while a raise in indirect taxes increases income inequality. Finally, the relationship between inequality and output is also explored.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://cadmus.eui.eu/dspace/bitstream/1814/7687/1/RSCAS_2007_39.pdf
File Function: Full text
Download Restriction: no

Paper provided by European University Institute in its series RSCAS Working Papers with number 2007/39.

as
in new window

Length:
Date of creation: 18 Dec 2007
Date of revision:
Handle: RePEc:rsc:rsceui:2007/39
Contact details of provider: Postal: Convento, Via delle Fontanelle, 19, 50014 San Domenico di Fiesole (FI) Italy
Web page: http://www.eui.eu/RSCAS/

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Francesco Giavazzi & Marco Pagano, 1990. "Can Severe Fiscal Contractions Be Expansionary? Tales of two Small Euopean Countries," Working Papers 89, Dipartimento Scienze Economiche, Universita' di Bologna.
  2. Lawrence J. Christiano & Martin Eichenbaum & Charles Evans, 2001. "Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy," NBER Working Papers 8403, National Bureau of Economic Research, Inc.
  3. Galor, Oded & Tsiddon, Daniel, 1996. "Income Distribution and Growth: The Kuznets Hypothesis Revisited," Economica, London School of Economics and Political Science, vol. 63(250), pages S103-17, Suppl..
  4. Francesco Giavazzi & Marco Pagano, 1995. "Non-Keynesian Effects of Fiscal Policy Changes: International Evidence and the Swedish Experience," NBER Working Papers 5332, National Bureau of Economic Research, Inc.
  5. Carlo A. Favero, . "How do European monetary and fiscal authorities behave?," Working Papers 214, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  6. Edward N. Wolff & Ajit Zacharias, 2007. "The Distributional Consequences Of Government Spending And Taxation In The U.S., 1989 And 2000," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(4), pages 692-715, December.
  7. Marcellino, Massimiliano, 2002. "Some Stylized Facts on Non-Systematic Fiscal Policy in the Euro Area," CEPR Discussion Papers 3635, C.E.P.R. Discussion Papers.
  8. Ben S. Bernanke & Ilian Mihov, 1995. "Measuring monetary policy," Working Papers in Applied Economic Theory 95-09, Federal Reserve Bank of San Francisco.
  9. Borooah, Vani K & McGregor, Patrick, 1990. "The Decomposition of Income Inequality: An Analysis Based on the Northern Ireland Family Expenditure Survey for 1985," Bulletin of Economic Research, Wiley Blackwell, vol. 42(4), pages 265-83, October.
  10. Amparo Castelló-Climent, 2001. "Desigualdad en la distribución de la renta, políticas impositivas y crecimiento económico en los países de la OCDE," Investigaciones Economicas, Fundación SEPI, vol. 25(3), pages 473-514, September.
  11. Acemoglu, Daron & Robinson, James A, 2002. "The Political Economy of the Kuznets Curve," Review of Development Economics, Wiley Blackwell, vol. 6(2), pages 183-203, June.
  12. Olivier Blanchard & Roberto Perotti, 2002. "An Empirical Characterization Of The Dynamic Effects Of Changes In Government Spending And Taxes On Output," The Quarterly Journal of Economics, MIT Press, vol. 117(4), pages 1329-1368, November.
  13. Amiel, Yoram & Cowell, Frank A., 1992. "Measurement of income inequality : Experimental test by questionnaire," Journal of Public Economics, Elsevier, vol. 47(1), pages 3-26, February.
  14. Jha, Sailesh K., 1996. "The Kuznets curve: A reassessment," World Development, Elsevier, vol. 24(4), pages 773-780, April.
  15. Hannu Tanninen, 1999. "Income inequality, government expenditures and growth," Applied Economics, Taylor & Francis Journals, vol. 31(9), pages 1109-1117.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:rsc:rsceui:2007/39. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (RSCAS web unit)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.