In the context of economic and financial difficulties, the debate over the effect of income taxation and redistribution has come back in most of the European countries. In this paper, we use the LIS data to examine the impact of income redistribution on middle class households from a...

We analyse the link between income distribution and the current account for the period 1972-2007. We find that rising (top-end) personal inequality leads to a decrease of the current account, ceteris paribus. This result is consistent with consumption externalities resulting from upward-looking...