Aizenman, Joshua. <br/><br/>
Income inequality, tax base and sovereign spreads / 
Joshua Aizenman, Yothin Jinjarak. 
 - Cambridge, Mass.  National Bureau of Economic Research  2012. 
 - 1 online resource:  illustrations (black and white); 
 - NBER working paper series  no. w18176 .
 - Working Paper Series (National Bureau of Economic Research)  no. w18176. .
<br/><br/> June 2012. 
<br/><br/> This paper investigates the association between greater income inequality, de-facto fiscal space, and sovereign spreads. Using data from 50 countries in 2007, 2009 and 2011, we find that higher income inequality is associated with a lower tax base, lower de-facto fiscal space, and higher sovereign spreads. The economic magnitude of these effects is large: at the margin, a one point of the Gini coefficient of inequality (in a scale of 0-100), is associated in 2011 with a lower tax base of 2 percent of the GDP, and with a higher sovereign spread of 45 basis points. 
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