Financial Development and the "Growth-Inequality-Poverty" Triangle

Abdelhafidh Dhrifi ()

Journal of the Knowledge Economy, 2015, vol. 6, issue 4, 1163-1176

Abstract: The main objective of this paper is to study the effects of financial development on poverty reduction taking into account the simultaneous effects on growth and inequality. In order to do so, we decided to make a comparative study between three groups of countries according to the chosen criterion income. We are going to build a model of simultaneous equations over the period of 1990–2010. The results generated by this study have identified that financial development promotes economic growth and reduce poverty in middle- and high-income countries; whereas in low-income countries, financial system does not have a positive effect on these economies. The study showed also that financial development exacerbates inequality of income distribution in countries with low and middle income; whereas for high-income countries, any improvement in the financial system resulted in a decrease in inequality. Copyright Springer Science+Business Media New York 2015

Keywords: Financial development; Growth; Inequality; Poverty; Simultaneous equations (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (11)

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DOI: 10.1007/s13132-014-0200-0

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