TY - JOUR A1 - Clemens, Marius A1 - Eydam, Ulrich A1 - Heinemann, Maik T1 - Inequality over the business cycle: the role of distributive shocks JF - Macroeconomic dynamics N2 - This paper examines how wealth and income inequality dynamics are related to fluctuations in the functional income distribution over the business cycle. In a panel estimation for OECD countries between 1970 and 2016, although inequality is, on average countercyclical and significantly associated with the capital share, one-third of the countries display a pro- or noncyclical relationship. To analyze the observed pattern, we incorporate distributive shocks into an RBC model, where agents are ex ante heterogeneous with respect to wealth and ability. We find that whether wealth and income inequality behave countercyclically or not depends on the elasticity of intertemporal substitution and the persistence of shocks. We match the model to quarterly US data using Bayesian techniques. The parameter estimates point toward a non-monotonic relationship between productivity and inequality fluctuations. On impact, inequality increases in response to TFP shocks but subsequently declines. Furthermore, TFP shocks explain 17% of inequality fluctuations. KW - business cycle KW - income and wealth inequality KW - distributive shocks KW - D31 KW - E25 KW - E32 Y1 - 2021 U6 - https://doi.org/10.1017/S1365100521000523 SN - 1365-1005 SN - 1469-8056 VL - 27 IS - 3 SP - 571 EP - 600 PB - Cambridge University Press CY - Cambridge ER - TY - JOUR A1 - Eydam, Ulrich A1 - Qualo, Hannes T1 - Income inequality and taxes BT - an empirical assessment JF - Applied economics letters N2 - Economic literature offers several distinct explanations for the raising income inequality observed in several countries. In the debate about the causes of inequality a growing strand of research focuses on the effects of taxation on income inequality. We contribute to this literature by providing a systematic empirical account of the relationship between income inequality and personal income taxation (PIT) for a set of countries over the period 1981–2005. In order to take alternative explanations into account and to isolate the effects of tax progressivity, we include a wide range of control variables. We address potential reverse causality between inequality and PIT by using the variation in tax schedules of neighbouring countries. Our results confirm a statistically significant negative association between the progressivity of PIT and income inequality. Overall, we find that especially the average and the marginal tax rate have the potential to reduce income inequality. This finding is qualitatively robust across various different empirical specifications. KW - income inequality KW - tax progressivity KW - personal income taxation KW - instrumental variables Y1 - 2023 U6 - https://doi.org/10.1080/13504851.2023.2208328 SN - 1350-4851 SN - 1466-4291 SP - 1 EP - 8 PB - Routledge CY - Abingdon ER - TY - JOUR A1 - Covi, Giovanni A1 - Eydam, Ulrich T1 - End of the sovereign-bank doom loop in the European Union? BT - the Bank Recovery and Resolution Directive JF - Journal of evolutionary economics N2 - In this paper we examine the relationship between the default risk of banks and sovereigns, i.e. the 'doom-loop'. Specifically, we try to assess the effectiveness of the implementation of the new recovery and resolution framework in the European Union. We use a panel with daily data on European banks and sovereigns ranging from 2012 to 2016 in order to test the effects of the Bank Recovery and Resolution Directive on the two-way feedback process. We find that there was a pronounced feedback loop between banks and sovereigns from 2012 to 2014. However, after the implementation of the European Banking Union, in 2015/2016, the magnitude of the doom-loop decreased and the spillovers became not statistically significant. Furthermore, our results suggest that the implementation of the new resolution framework is a suitable candidate to explain this finding. Overall, the results are robust across several specifications. KW - financial stability KW - sovereign bail-out KW - bail-in tool KW - doom loop KW - European Banking Union KW - Bank Recovery and Resolution Directive Y1 - 2020 U6 - https://doi.org/10.1007/s00191-018-0576-2 SN - 0936-9937 SN - 1432-1386 VL - 30 IS - 1 SP - 5 EP - 30 PB - Springer CY - Berlin ; Heidelberg ; New York ER - TY - JOUR A1 - Covi, Giovanni A1 - Eydam, Ulrich T1 - Correction to: End of the sovereign-bank doom loop in the European Union? BT - the Bank Recovery and Resolution Directive JF - Journal of evolutionary economics Y1 - 2018 U6 - https://doi.org/10.1007/s00191-018-0577-1 SN - 0936-9937 SN - 1432-1386 N1 - Correction to: https://doi.org/10.1007/s00191-018-0576-2 VL - 30 IS - 1 SP - 31 EP - 38 PB - Springer CY - New York ER -