Revisiting the Financial Development and Income Inequality Nexus: Evidence from Hungary

Barhoom Faeyzh ()
Additional contact information
Barhoom Faeyzh: Faculty of Economics, Management and Organizational Sciences, Hungarian University of Agriculture and Life Sciences (MATE), Hungary

Acta Universitatis Sapientiae, Economics and Business, 2023, vol. 11, issue 1, 227-257

Abstract: The finance–inequality nexus has been a major topic of discussion since the 1990s and became even more so after the financial crisis of 2007–08. This paper aims to empirically investigate whether financial development and/or financial openness increased or decreased income inequality in Hungary over the period of 1971–2019. An empirical analysis of an autoregressive distributed lag (ARDL) model suggests the existence of long-run co-integration between the analysed variables. Financial openness contributes to reducing Hungarian income inequality in the short run but fuels greater income inequality in the long run. Whereas the effects of financial development on inequality vary according to the indicators, the domestic credit by banks has a significant negative effect on inequality in the short and long run, while the impact of the credit to the private sector from all the sectors on inequality is insignificant.

Keywords: financial development; income inequality; Hungary; ARDL (search for similar items in EconPapers)
JEL-codes: C22 D63 G10 G21 O15 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.2478/auseb-2023-0011 (text/html)

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:vrs:auseab:v:11:y:2023:i:1:p:227-257:n:3

DOI: 10.2478/auseb-2023-0011

Access Statistics for this article

Acta Universitatis Sapientiae, Economics and Business is currently edited by Dávid László

More articles in Acta Universitatis Sapientiae, Economics and Business from Sciendo
Bibliographic data for series maintained by Peter Golla ().