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Is it possible to adjust ‘with a human face’? Differences in fiscal consolidation strategies between Hungary and Iceland

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  • Bruno Martorano

Abstract

Before the recent economic crisis, Hungary and Iceland were considered to be two excellent models of development. Hungary and Iceland were among the countries affected earliest and most by the recent macroeconomic shock, suffering a similar drop in GDP.While the Hungarian government implemented a flat tax reform in order to stimulate economic activity, the Icelandic government replaced its flat tax system with a progressive one increasing the participation of high income groups in the adjustment process. The aim of this paper is to compare the opposite adjustment paths followed by Hungary and Iceland on selected outcomes.

Suggested Citation

  • Bruno Martorano, 2014. "Is it possible to adjust ‘with a human face’? Differences in fiscal consolidation strategies between Hungary and Iceland," Papers inwopa719, Innocenti Working Papers.
    • Handle: RePEc:ucf:inwopa:inwopa719
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    Cited by:

    1. Yekaterina Chzhen, 2014. "Child Poverty and Material Deprivation in the European Union during the Great Recession," Papers inwopa723, Innocenti Working Papers.

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    Keywords

    crisis; financial analysis; financial systems; inequality; tax reforms; tax revenues;
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