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Inequality and the Crisis: A Causal Inference Analysis

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  • Mario Holzner

    (The Vienna Institute for International Economic Studies, wiiw)

Abstract

A new database for the calculation of quarterly income inequality measures was established for 11 economies from Central, East and Southeast Europe for the period of 1st quarter 2000 to 4th quarter 2011. Based on the large panel of the acquired quarterly Gini coefficients an ‘Acemoglu-style’ causal inference analysis on the impact of the global financial crisis on economic growth and income inequality in transition economies was performed. The results suggest that at least in the short and medium run the growth model of transition economies switched to an industrial, export-led growth model as foreign capital flows dried up. While in the private sector wage dispersion further continued to increase during the boom just as during the economic break-down, the public sector acted inequality reducing both in the period of plenty as well as in the age of austerity.

Suggested Citation

  • Mario Holzner, 2013. "Inequality and the Crisis: A Causal Inference Analysis," wiiw Balkan Observatory Working Papers 110, The Vienna Institute for International Economic Studies, wiiw.
  • Handle: RePEc:wii:bpaper:110
    as

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    References listed on IDEAS

    as
    1. Anthony B. Atkinson & Salvatore Morelli, 2011. "Economic crises and Inequality," Human Development Research Papers (2009 to present) HDRP-2011-06, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
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    7. Engelbert Stockhammer, 2012. "Rising Inequality as a Root Cause of the Present Crisis," Working Papers wp282, Political Economy Research Institute, University of Massachusetts at Amherst.
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    More about this item

    Keywords

    Income inequality; economic growth; transition economies; economic crisis;
    All these keywords.

    JEL classification:

    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • P36 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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