Financial development and income inequality

Jauch, Sebastian und Watzka, Sebastian (2011): Financial development and income inequality. CESifo working paper: Fiscal Policy, Macroeconomics and Growth,

Abstract

We analyze the link between financial development and income inequality for a broad unbalanced dataset of 138 developed and developing countries over the years 1960 to 2008. Using credit-to-GDP as measure of financial development, our results reject theoretical models predicting a negative impact of financial development on income inequality measured by the Gini coefficient. Controlling for country fixed effects and GDP per capita, we find that financial development has a positive effect on income inequality. These results are robust to different measures of financial development.

• Dokumententyp: Paper
• Fakultät: Volkswirtschaft ; Volkswirtschaft > Lehrstühle > Seminar für Makroökonomie
• Themengebiete: 300 Sozialwissenschaften > 330 Wirtschaft
• Sprache: Englisch