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Income Inequality, Fiscal Stimuli and Political (In)Stability

Income Inequality, Fiscal Stimuli and Political (In)Stability

Authors
João Tovar Jalles
Category:
Research Papers /
Economics for Policy: Research Papers

ABSTRACT

Using data for a large panel of countries, this paper investigates the role played by income inequality and fiscal stimuli episodes in shaping the likelihood of political stability. By means of Tobit estimations, we show that a rise in inequality increases the probability of government crises. However, such adverse distributional effect is reduced when expansionary or increasingly expansionary fiscal stimuli episodes or successful fiscal stimuli programs are put in place.

WITH:

Luca Agnello

Department of Economics, Business and Statistics (SEAS) and University of Palermo

Vitor Castro

Faculty of Economics, University of Coimbra and Economic Policies Research Unit (NIPE), University of Minho

Ricardo M. Sousa

Economic Policies Research Unit (NIPE), University of Minho and LSE Alumni Association, London School of Economics and Political Science

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About Authors

João Tovar Jalles
João Tovar Jalles, a Portuguese national, is a Senior Associate Professor of Economics at the University of Lisbon. Previously, he was a Senior Economist at the Portuguese Public Finance Council. Before that he spent 5 years at the IMF: 1 year in the Research Department and 4 years in the Fiscal Affairs Department, where he participated in negotiation and review missions to Senegal and Georgia.