IDEAS home Printed from https://ideas.repec.org/a/bpj/globdv/v15y2024i1p47-62n1002.html
   My bibliography  Save this article

Income Inequality and External Wealth of Nations

Author

Listed:
  • Carrera Jorge

    (Universidad Nacional de La Plata, La Plata, Argentina)

  • Montes-Rojas Gabriel

    (Instituto Interdisciplinario de Economía Política-CONICET, Universidad de Buenos Aires, Ciudad Autónoma de Buenos Aires, Argentina)

  • Panigo Demian

    (Universidad Nacional de La Plata, La Plata, Argentina)

  • Toledo Fernando

    (Universidad Nacional de La Plata, La Plata, Argentina)

Abstract

We study the relationship between income inequality and external wealth using dynamic panel data models with 5-years average observations to consider the slow motion of available data in the case of 88 emerging and developing economies for the period 1970–2020. We find evidence of a significant 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 % 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.

Suggested Citation

  • Carrera Jorge & Montes-Rojas Gabriel & Panigo Demian & Toledo Fernando, 2024. "Income Inequality and External Wealth of Nations," Journal of Globalization and Development, De Gruyter, vol. 15(1), pages 47-62.
    • Handle: RePEc:bpj:globdv:v:15:y:2024:i:1:p:47-62:n:1002
    DOI: 10.1515/jgd-2023-0042
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/jgd-2023-0042
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/jgd-2023-0042?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    income inequality; net external wealth; panel data models;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:globdv:v:15:y:2024:i:1:p:47-62:n:1002. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.