Income inequality and banking crises: Testing the level hypothesis directly
Giorgio Bellettini (),
Flavio Delbono (),
Peter Karlström and
Journal of Macroeconomics, 2019, vol. 62, issue C
We perform an empirical analysis to investigate the relationship between income inequality and the occurrence of banking crises on a panel of 33 advanced countries in the period 1970–2011. Differently from other empirical studies, we focus on levels rather than growth rates of income inequality. We find a statistically significant and positive relationship between the value of the Gini index and the probability of banking crises. This result is confirmed when income distribution is summarized by the top 1% income share.
Keywords: Income inequality; Banking crises; Credit booms (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:62:y:2019:i:c:s0164070417305682
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