WHY DO MORE POLARIZED COUNTRIES RUN MORE PROCYCLICAL FISCAL POLICY?

• 成果类型: Article
• 署名作者: Woo, Jaejoon
• 署名单位: Organisation for Economic Co-operation & Development (OECD); DePaul University
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/rest.91.4.850
• 发表日期: 2009-11
• 页码: 850-870
• 关键词: government size; institutions; INEQUALITY; LESSONS

摘要

We study the cyclical behavior of fiscal policy to explain why some countries exhibit procyclical fiscal policy stances-being expansionary in good times and contractionary in bad times. We develop a model that links the polarization of preferences over fiscal spending to the procyclicality bias. We then present evidence that social polarization as measured by income inequality and educational inequality is consistently and positively associated with fiscal procyclicality, even after controlling for other determinants from existing theories. We also find a strong negative impact of fiscal procyclicality on economic growth.