The rich, the poor, and the middle class: banking crises and income distribution

Mehdi El Herradi () and Aurélien Leroy

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Abstract: How do banking crises a ect rich, middle-class and poor households? This paper quanti es the distributional implications of banking crises for a panel of 140 economies over the 1970-2017 period. We rely on di erent empirical settings, including an instrumental variable approach, that exploit the geographical di usion of banking crises across borders. Our results show that banking crises systematically reduce the income share of rich households and positively a ect middle-class households. We also nd that income inequality increases during periods preceding the triggering of a banking crisis.

Keywords: banking crises; income distribution; inequality (search for similar items in EconPapers)
Date: 2021-06
New Economics Papers: this item is included in nep-ban and nep-his
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Journal Article: The rich, poor, and middle class: Banking crises and income distribution (2022)
Working Paper: The rich, poor, and middle class: Banking crises and income distribution (2022)
Working Paper: The rich, the poor, and the middle class: banking crises and income distribution (2021)
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