Does Income Inequality Affect Capital Flows? Evidence from Emerging Markets and Developing Economies

Jorge Carrera, Gabriel Montes-Rojas (gabriel.montes@fce.uba.ar), Mariquena Solla and Fernando Toledo
Additional contact information
Jorge Carrera: CONICET/UNLP/BCRA
Mariquena Solla: UNLP/BCRA
Fernando Toledo: UNLP/BCRA

No 268, Working Papers from Red Nacional de Investigadores en Economía (RedNIE)

Abstract: We assess the effect of income inequality on capital flows. We differentiate between aggregate capital inflows (external liabilities accumulation) and outflows (external assets accumulation) and disaggregated public andprivate capital inflows and outflows. We estimate dynamic panel data models using annual observations for Emerging Markets and Developing Economies during the 1999-2019 period. We find that the Top 1 and theTop 10 inequality measures are positive and statistically significant for aggregate and private inflows, and the Gini disposable income is statistically significant only for one explored method. The evidence alsoshows that there is a weak effect on private outflows, robust across methods only at the aggregate specification. The results also suggest that financial openness is positively associated with a greater effect ofinequality.

Keywords: Income Inequality; Capital Flows; Financial Openness; Panel Data Models (search for similar items in EconPapers)
JEL-codes: C23 D31 F21 F32 F41 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2023-08
New Economics Papers: this item is included in nep-fdg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://rednie.eco.unc.edu.ar/files/DT/268.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aoz:wpaper:268

Access Statistics for this paper

More papers in Working Papers from Red Nacional de Investigadores en Economía (RedNIE) Contact information at EDIRC.
Bibliographic data for series maintained by Laura Inés D Amato (laura.damato@gmail.com).