Inequality and Crises Revisited

Salvatore Morelli and Anthony Atkinson

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: Recent debate has suggested that growing levels or high levels of inequality may be systematically associated with the occurrence of banking crises. Using the updated version of the Chartbook of Economic Inequality, this paper provides new empirical evidence on the `level' hypothesis and reassesses the empirical validity of the `growth' hypothesis. In line with previous work, the empirical analysis on the entire set of countries and years under investigation does not provide any conclusive and compelling statistical support to either of the hypotheses. However, the apparent statistical insignificance of the findings does not rule out the economic relevance of the question at hand, given that the hypotheses cannot be rejected for important crises and countries such as the US and the UK. Hence, the overall evidence is far from being conclusive and there are several reasons to shed further light on this important research topic.

JEL-codes: D31 D39 (search for similar items in EconPapers)
Date: 2015-01-22
New Economics Papers: this item is included in nep-ltv
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Citations: View citations in EconPapers (50)

Published in Economia Politica - Journal of Analytical and Institutional Economics, 2015, 32(1), pp 31-51.

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Related works:
Journal Article: Inequality and crises revisited (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:387

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