FINANCE AND INEQUALITY: HOW DOES GLOBALIZATION CHANGE THEIR RELATIONSHIP?

Takuma Kunieda, Keisuke Okada and Akihisa Shibata

Macroeconomic Dynamics, 2014, vol. 18, issue 5, 1091-1128

Abstract: This research demonstrates that international financial integration changes the way in which financial development affects inequality within a country. Specifically, both cross-country analysis and dynamic panel data analysis using data collected from more than 100 countries provide evidence indicating that if the financial market of a country is strongly closed to the world market, financial development narrows inequality within that country, whereas if the financial market of a country is strongly open to the world market, financial development widens inequality within that country. Our theoretical framework provides a possible explanation for our empirical findings.

Date: 2014
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Working Paper: Finance and Inequality: How Does Globalization Change Their Relationship? (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:cup:macdyn:v:18:y:2014:i:05:p:1091-1128_00

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