We use heterogeneous panel cointegration techniques to examine the long-run effect of financial development on income inequality in a panel of 119 countries from 1980 to 2015. We include real GDP per capita in the cointegration relation and explicitly deal with cross-sectional dependence in the data that arises due to unobserved common factors. On average, financial development reduces income inequality in the long-run, with the result robust to different measures of finance and across country income groups.

The long-run relationship between finance and income inequality: Evidence from panel data

Di Tommaso C.
2020-01-01

Abstract

We use heterogeneous panel cointegration techniques to examine the long-run effect of financial development on income inequality in a panel of 119 countries from 1980 to 2015. We include real GDP per capita in the cointegration relation and explicitly deal with cross-sectional dependence in the data that arises due to unobserved common factors. On average, financial development reduces income inequality in the long-run, with the result robust to different measures of finance and across country income groups.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11586/296054
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