Finance, inequality, and poverty: cross-country evidence

Thorsten Beck (), Asli Demirguc-Kunt and Ross Levine ()

No 3338, Policy Research Working Paper Series from The World Bank

Abstract: While substantial research finds that financial development boosts overall economic growth, the authors study whether financial development is pro-poor: Does financial development disproportionately raise the income of the poor? Using a broad cross-country sample, the authors find that the answer is yes: Financial intermediary development reduces income inequality by disproportionately boosting the income of the poor and therefore reduces poverty. This result is robust to controlling for simultaneity bias and reverse causation.

Keywords: Health Economics&Finance; Payment Systems&Infrastructure; Economic Conditions and Volatility; Economic Theory&Research; Environmental Economics&Policies; Inequality; Economic Theory&Research; Achieving Shared Growth; Health Economics&Finance; Governance Indicators (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cwa, nep-dev and nep-fin
Date: 2004-06-01
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Working Paper: Finance, Inequality, and Poverty: Cross-Country Evidence (2004)
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Persistent link: http://EconPapers.repec.org/RePEc:wbk:wbrwps:3338

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