interpretation—fiscal redistribution requires tax and transfer

Battisti and Zeira 16- Joseph Stiglitz is an extremely high-profile and well-regarded economist who won the Nobel Prize for Economic Sciences in 2001. Kaushik Basu is also a very wellknown and respected economist who currently holds the position of Chief Economist and Senior Vice President of the World Bank.

Michele Battisti & Joseph Zeira, "The Effects of Fiscal Redistribution," SpringerLink, xx-xx-2016, https://link.springer.com/chapter/10.1057/9781137554543_7-- 嘉玮

Every discussion on income distribution and inequality distinguishes between market income, namely income before tax and without transfers, and disposable, or net income, which is after tax and including transfers. Hence, taxation and transfers create a redistribution of income. This redistribution is usually progressive, as direct taxes and subsidies are progressive, and thus it is supposed to reduce inequality, in the transition from market income to disposable income. This paper focuses on measuring the effect of fiscal policy in income redistribution and in reducing inequality. It also examines which type of fiscal policy is most strongly related to the redistribution of income, are they transfer payments? Is it direct taxation? Or is it the overall measure of fiscal policy, namely public expenditures, which are also known as the size of the public sector?