FINANCE AND INEQUALITY: THE CASE OF INDIA

James B. Ang ()

No 08/08, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: Although theory emphasizes the role of financial market frictions in explaining income inequality, there is little empirical research exploring how financial development and financial sector reforms influence the evolution of income inequality. This paper examines how finance impacts on income inequality in India using annual time series data for over half a century. The results indicate that while financial development helps reduce income inequality, financial liberalization seems to have exacerbated income inequality in India. Our results are robust to the use of different measures for financial development and financial liberalization.

Keywords: Financial development; financial liberalization, income inequality; India. (search for similar items in EconPapers)
JEL-codes: G28 O16 O53 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn, nep-cwa and nep-dev
Date: 2008-04-02
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Working Paper: FINANCE AND INEQUALITY: THE CASE OF INDIA (2008)
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