Black market premium and income distribution

Mohsen Bahmani-Oskooee, Gour Goswami () and Solomon Mebratu
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Solomon Mebratu: The University of Wisconsin-Milwaukee, USA

Journal of Developing Areas, 2006, vol. 39, issue 2, 17-28

Abstract: The literature on income inequality includes many studies that have tried to identify factors such as level of economic development, rate of economic growth, population growth, resource endowment, price instability, and openness as main determinant of income inequality. In this paper, we show empirically that income inequality is higher in countries that have black market for foreign exchange. One major policy implication of our finding is that exchange rate unification should reduce income inequality.

Keywords: income inequality; black market premium; cross-sectional data (search for similar items in EconPapers)
JEL-codes: F31 (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:jda:journl:vol.39:year:2006:issue2:pp:17-28

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