Fiscal Transfers and Economic Convergence

Capella-Ramos, João; Checherita‐Westphal, Cristina; Leiner-Killinger, Nadine

doi:10.2139/ssrn.3742258

Cited by 4 publications

(2 citation statements)

References 24 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Reducing disparities in living standards is therefore either not the main objective of EU budgetary procedures or these policies have not been implemented successfully enough. According to our results from the application of the Bayoumi and Masson [18] model, β_redist is above 1 which supports the findings of Capella-Ramos, et al [23].…”

Section: Discussionsupporting

confidence: 91%

“…The results of Capella-Ramos, et al are intriguing from the standpoint of the actual effects of transfer mechanisms [23]. They show that the redistribution implemented by the EU through member state contributions and structural funds primarily addresses long-run convergence in disposable income rather than real convergence and short-run asymmetric shocks.…”

Section: Literature Reviewmentioning

confidence: 99%

See 1 more Smart Citation

Effects of financial transfers on redistribution and risk sharing within the EU and the Euro Area

Pavlov,

Kostov

2023

ijirss

View full text Add to dashboard Cite

The effectiveness of European fiscal policies is of particular importance for the future economic performance of the community especially during times of crisis due to polarized public opinion and expert criticism. This study attempts to identify the redistributive and risk-sharing effects resulting from centralized financial transfers within the EU. We investigate a broader sample of EU (28) countries during 2000-2021 in addition to the Euro area countries used in most studies on the issue. Traditional regression methods and the Pooled Mean Group (PMG) model were used in order to maximize the objectivity of the analysis. The study’s results show that long-term redistribution is virtually absent with levels below 1%. In some cases, the values are even negative which is an interesting (but not unattested) finding in the context of such a sensitive issue as the permanent shift of wealth within the EA and EU. Budget transfers achieved a risk-sharing effect of 11% for the EU and 29% for the EA. Risk sharing levels are comparable and even better than those of some fully-fledged fiscal federations. This is an attestation to the capacity of the EU to successfully implement its intended policies despite some criticism.

show abstract

Section: Discussionsupporting

confidence: 91%

Section: Literature Reviewmentioning

confidence: 99%

Effects of financial transfers on redistribution and risk sharing within the EU and the Euro Area

Pavlov,

Kostov

2023

ijirss

View full text Add to dashboard Cite

show abstract

Regional per capita income inequality and fiscal policy in Mexico, 1989–2021

Mendoza-González,

Quintana-Romero,

Guerrero-Jiménez

2024

Ann Reg Sci

View full text Add to dashboard Cite

In this paper, we use trends in GDP gaps per capita or relative GDP per capita indicator as an aggregate alternative measure to show regional per capita income inequality between the states of Mexico. The indicator compares each state's gross domestic product per capita (GDPpc) with the annual average of each year and 2019; this allows for evaluating growth performance before and after the COVID-19 pandemic. The econometric method is a spatial dynamic panel, and the convergence–divergence model is conditioned to the behavior of the fiscal policy followed in each state: The fiscal policy indicators are current expenditure and public investment. In general, it is concluded that the amounts of current spending and public investment, in an active fiscal policy context, tend to favor states with higher relative per capita income, which is why an increase in regional inequality is observed. However, it tends to affect low-income regions more, with higher ratios of current spending and investment to GDP, which reduces regional inequality. Therefore, the short-term effects of active fiscal policy to reduce regional disparities can be neutralized.

show abstract