Income Inequality and External Wealth of Nations

Gabriel Montes Rojas, Jorge Carrera, Demián Panigo, Mariquena Solla and Fernando Toledo
Authors registered in the RePEc Author Service: Gabriel Montes-Rojas ()

No 4675, Asociación Argentina de Economía Política: Working Papers from Asociación Argentina de Economía Política

Abstract: We study the relationship between income inequality and external wealth using dynamic panel data models with annual observations of 88 emerging and developing economies for the period 1970-2020. We find evidence in favor of a significant and positive association between inequality indicators and net external wealth. This relationship is statistically significant for all income inequality measures and net external wealth variables. If the Top 1 of the richest individuals in a given country increments their share by 1 percentage point this will produce an average same-year increment in net foreign assets of 0.45% in terms of the country’s GDP. The long-run effect is more than double in magnitude (1.05% of GDP). For the Top 10, the long-run effect increases tenfold (11.6% of GDP). When disaggregated into foreign assets and liabilities, we find a heterogeneous behavior of the financial elites. These findings reveal that financialized elites have a greater propensity to accumulate external wealth than the rest of the population.

JEL-codes: E21 O15 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2023-11
New Economics Papers: this item is included in nep-fdg, nep-ifn and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://aaep.org.ar/works/works2023/4675.pdf (application/pdf)

Related works:
Journal Article: Income Inequality and External Wealth of Nations (2024)
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:aep:anales:4675

Access Statistics for this paper

More papers in Asociación Argentina de Economía Política: Working Papers from Asociación Argentina de Economía Política Contact information at EDIRC.
Bibliographic data for series maintained by Juan Manuel Quintero ().