УТИЦАЈ МАКРОЕКОНОМСКИХ КРЕТАЊА И ФИСКАЛНЕ ПОЛИТИКЕ НА ЕКОНОМСКУ НЕЈЕДНАКОСТ
THE INFLUENCE OF MACROECONOMIC DYNAMICS AND FISCAL POLICY ON ECONOMIC INEQUALITY

Summary/Abstract: This paper examines the question of the impact of macroeconomic dynamic and fiscal policy on economic inequality in the countries of Europe and Central Asia during 1998–2017. Over the past three decades, economic inequality has experienced rise in the observed group of countries, with the significantly higher growth in terms of market income than disposable income inequality. The preliminary descriptive analysis indicates that macroeconomic and fiscal factors affect dynamic on inequality of the market income distribution, as well as the impact of fiscal policy on inequality of the disposable income distribution. Our findings suggest that inequality in the market income distribution is affected by macroeconomic factors, and point that higher level of development, larger and more accelerating growth, more economic openness, and higher average number of years of schooling reduces inequality, while higher unemployment has the opposite effect. Additionally, we show that reduction of disposable income distribution is related with the higher share of public expenditures and taxes in GDP, as well as with the increase of state investments in education and health. The evidence of the cross-section analysis supports the argument that more progressive personal income tax reduces the level of economic inequality. Finally, based on the paper empirical results, we propose economic policies that would reduce economic inequality without compromising economic efficiency and economic growth.

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