| Title: | Fiscal multiplier and the role of income and wealth inequality |
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| Authors: | ID Senekovič, Marko (Author)
ID Bekő, Jani (Author) |
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| Files: |  RAZ_Senekovic_Marko_2025.pdf (2,81 MB)
MD5: E8387BC2AD152B4974EB2D3FD8F1E063
 https://hrcak.srce.hr/en/clanak/478775
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| Language: | English |
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| Work type: | Scientific work |
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| Typology: | 1.01 - Original Scientific Article |
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| Organization: | EPF - Faculty of Business and Economics
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| Abstract: | There is a lack of research concerning the influence of economic inequality on the size of fiscal multipliers. To address this, we apply a VAR methodological framework to assess the magnitude of fiscal multipliers for 47 economies, using a new quarterly dataset spanning the period from 1995 to 2021. We then gauge the impact of the battery of income and wealth inequality measures on the size of government consumption multipliers. To ensure the robustness of the results, a yearly panel data sample was also tested. The key findings of our empirical exercise can be outlined as follows. First, the estimated government consumption multipliers exhibit a generally positive trajectory throughout the forecast horizon in approximately 66% of the countries analysed, while in 19% of the sample, they remain largely negative, and in the remaining 15% of cases, they display a mixed pattern, being positive only during certain periods. Second, in 53% of the countries examined, the fiscal multiplier exceeds the threshold of one at least once during the forecast period, suggesting a greater output effect of fiscal expansion in these countries. Third, the more pronounced the income and wealth inequality in a country, the higher the value of the fiscal multiplier. This research outcome supports the proposition that higher economic inequality, especially income inequality, will generate greater government spending effects. |
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| Keywords: | fiscal policy, fiscal multiplier, economic inequality, panel VAR |
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| Publication status: | Published |
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| Publication version: | Version of Record |
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| Publication date: | 23.05.2025 |
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| Publisher: | Sveučilište Jurja Dobrile, Odjel za ekonomiju i turizam "Dr. Mijo Mirković" |
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| Year of publishing: | 2025 |
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| Number of pages: | str. 217-248 |
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| Numbering: | Vol. 38, no. 1 |
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| PID: | 20.500.12556/DKUM-93192  |
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| UDC: | 336.1 |
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| ISSN on article: | 1848-9664 |
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| COBISS.SI-ID: | 239102979 |
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| DOI: | 10.32728/er-ei.38.1.8 |
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| Publication date in DKUM: | 12.06.2025 |
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| Views: | 178 |
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| Downloads: | 472 |
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| Metadata: |    |
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| Categories: | Misc.
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