<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>In times of exceptionally severe crises, it may be necessary for the state, in the spirit of solidarity, to cushion the financial burdens borne by lower-income households. To do so, it might be necessary to use discretionary policies in addition to automatic stabilizers. High inflation caused by the Russian war of aggression on Ukraine is one such crisis. Since the state has no financial resources of its own, it can only do so - apart from stretching the burden over time - through increased redistribution from upper to lower incomes. What are the effects of this additional government redistribution along the income distribution when considering not only the expenditures for the discretionary relief packages, but also the revenues used for this purpose - which can only be quantified via economic modeling?</p>
</abstract>

In times of exceptionally severe crises, it may be necessary for the state, in the spirit of solidarity, to cushion the financial burdens borne by lower-income households. To do so, it might be necessary to use discretionary policies in addition to automatic stabilizers. High inflation caused by the Russian war of aggression on Ukraine is one such crisis. Since the state has no financial resources of its own, it can only do so - apart from stretching the burden over time - through increased redistribution from upper to lower incomes. What are the effects of this additional government redistribution along the income distribution when considering not only the expenditures for the discretionary relief packages, but also the revenues used for this purpose - which can only be quantified via economic modeling?

Built-in Solidarity: “Strong Shoulders” Finance Relief in Times of Crisis

Wirtschaftsdienst

This work is licensed under the Creative Commons Attribution 4.0 International License.

Eingebaute Solidarität: „Starke Schultern“ finanzieren Entlastungen in Krisenzeiten

In times of exceptionally severe crises, it may be necessary for the state, in the spirit of solidarity, to cushion the financial burdens borne by lower-income...

Built-in Solidarity: “Strong Shoulders” Finance Relief in Times of Crisis

Publié en ligne: 22 juil. 2023

Pages: 380 - 385

DOI: https://doi.org/10.2478/wd-2023-0114

© 2023 Niklas Isaak et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.