Income Distribution, Borrowing Constraints and Redistributive Policies

Berti Ceroni, Carlotta ; Bellettini, Giorgio (1999) Income Distribution, Borrowing Constraints and Redistributive Policies. Bologna: Dipartimento di Scienze economiche DSE, p. 11. DOI 10.6092/unibo/amsacta/4950. In: Quaderni - Working Paper DSE (359). ISSN 2282-6483.
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Abstract

This paper proposes an explanation for why universal suffrage has not implied larger rich-to-poor transfers of wealth. The main argument is that, in the presence of borrowing constraints, if current taxation finances (at least partially) policies that redistribute future income, the poor, who are more likely to be liquidity constrained, may form a coalition with the rich and vote for low redistribution. In this context, the effects of an increase in income inequality is concentrated among the poor or the middle class. In the former case, an increase in inequality tends to decrease redistribution, whereas, in the latter case, it tends to increase redistribution.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Berti Ceroni, Carlotta
Bellettini, Giorgio
Subjects
ISSN
2282-6483
DOI
Deposit date
05 Apr 2016 09:45
Last modified
05 Apr 2016 09:45
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