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Sectoral capital flows and income inequality

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  • Kumar, Ankit
  • Dash, Pradyumna

Abstract

The relationship between capital flows and income inequality has received increased attention in recent years. Using local projection, this paper investigates the impact of sectoral capital flows, encompassing net corporate flows, net bank flows, and net sovereign flows, on income inequality in 83 economies. The findings reveal that a rise in net bank flows tends to decrease inequality, particularly in economies where regulations support extending credit to marginalized sectors. In contrast, an upsurge in net corporate flows exacerbates income inequality, especially in economies characterized by lower labor income and higher equity dividends.

Suggested Citation

  • Kumar, Ankit & Dash, Pradyumna, 2024. "Sectoral capital flows and income inequality," Finance Research Letters, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:finlet:v:66:y:2024:i:c:s154461232400655x
    DOI: 10.1016/j.frl.2024.105625
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    References listed on IDEAS

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    More about this item

    Keywords

    Bank flows; Corporate flows; Income inequality;
    All these keywords.

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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