Fiscal policy and growth-inequality tradeoffs: Bayesian evidence from Cote d’Ivoire
The growing within-country income inequality has brought to the forefront of the economic policy agenda the question of the role of fiscal policy in income redistribution. However, there may be a tradeoff between the objectives of addressing income inequality and promoting economic growth vis-à-vis...
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| Format: | Article |
| Language: | English |
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General Association of Economists from Romania
2021-03-01
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| Series: | Theoretical and Applied Economics |
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| Online Access: |
http://store.ectap.ro/articole/1534.pdf
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| _version_ | 1819276032276955136 |
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| author | Kouassi YEBOUA |
| author_facet | Kouassi YEBOUA |
| author_sort | Kouassi YEBOUA |
| collection | DOAJ |
| description | The growing within-country income inequality has brought to the forefront of the
economic policy agenda the question of the role of fiscal policy in income redistribution. However,
there may be a tradeoff between the objectives of addressing income inequality and promoting
economic growth vis-à-vis fiscal policies. This study investigates the potential growth-inequality
tradeoffs in the design of fiscal policy in Cote d’Ivoire. Using a Bayesian VAR framework which is
more suitable to deal with possible issues that may appear in small data sample, the results show
that a positive shock in government current expenditure undermine economic growth but reduce
income inequality. Also, we find that public investment and direct taxes promote growth and reduce
income inequality while indirect taxes decelerate growth with a marginal effect on income
inequality. Overall, our findings reveal that government current expenditure is the fiscal policy
instrument that generates growth-inequality tradeoff in Cote d’Ivoire. |
| first_indexed | 2024-12-23T23:33:46Z |
| format | Article |
| id | doaj.art-e2e55445f44443c7b4f40a52c05fac11 |
| institution | Directory Open Access Journal |
| issn | 1841-8678 1844-0029 |
| language | English |
| last_indexed | 2024-12-23T23:33:46Z |
| publishDate | 2021-03-01 |
| publisher | General Association of Economists from Romania |
| record_format | Article |
| series | Theoretical and Applied Economics |
| spelling | doaj.art-e2e55445f44443c7b4f40a52c05fac112022-12-21T17:25:58ZengGeneral Association of Economists from RomaniaTheoretical and Applied Economics1841-86781844-00292021-03-01XXVIII129731018418678Fiscal policy and growth-inequality tradeoffs: Bayesian evidence from Cote d’IvoireKouassi YEBOUA0 African Futures and Innovation program Institute for Security Studies, Pretoria, South Africa The growing within-country income inequality has brought to the forefront of the economic policy agenda the question of the role of fiscal policy in income redistribution. However, there may be a tradeoff between the objectives of addressing income inequality and promoting economic growth vis-à-vis fiscal policies. This study investigates the potential growth-inequality tradeoffs in the design of fiscal policy in Cote d’Ivoire. Using a Bayesian VAR framework which is more suitable to deal with possible issues that may appear in small data sample, the results show that a positive shock in government current expenditure undermine economic growth but reduce income inequality. Also, we find that public investment and direct taxes promote growth and reduce income inequality while indirect taxes decelerate growth with a marginal effect on income inequality. Overall, our findings reveal that government current expenditure is the fiscal policy instrument that generates growth-inequality tradeoff in Cote d’Ivoire. http://store.ectap.ro/articole/1534.pdf fiscal policyincome inequalityeconomic growthbayesian varcote d’ivoire |
| spellingShingle | Kouassi YEBOUA Fiscal policy and growth-inequality tradeoffs: Bayesian evidence from Cote d’Ivoire Theoretical and Applied Economics fiscal policy income inequality economic growth bayesian var cote d’ivoire |
| title | Fiscal policy and growth-inequality tradeoffs: Bayesian evidence from Cote d’Ivoire |
| title_full | Fiscal policy and growth-inequality tradeoffs: Bayesian evidence from Cote d’Ivoire |
| title_fullStr | Fiscal policy and growth-inequality tradeoffs: Bayesian evidence from Cote d’Ivoire |
| title_full_unstemmed | Fiscal policy and growth-inequality tradeoffs: Bayesian evidence from Cote d’Ivoire |
| title_short | Fiscal policy and growth-inequality tradeoffs: Bayesian evidence from Cote d’Ivoire |
| title_sort | fiscal policy and growth inequality tradeoffs bayesian evidence from cote d ivoire |
| topic | fiscal policy income inequality economic growth bayesian var cote d’ivoire |
| url |
http://store.ectap.ro/articole/1534.pdf
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| work_keys_str_mv | AT kouassiyeboua fiscalpolicyandgrowthinequalitytradeoffsbayesianevidencefromcotedivoire |