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Financial Development and the "Growth-Inequality-Poverty" Triangle

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  • Abdelhafidh Dhrifi

Abstract

The main objective of this paper is to study the effects of financial development on poverty reduction taking into account the simultaneous effects on growth and inequality. In order to do so, we decided to make a comparative study between three groups of countries according to the chosen criterion income. We are going to build a model of simultaneous equations over the period of 1990–2010. The results generated by this study have identified that financial development promotes economic growth and reduce poverty in middle- and high-income countries; whereas in low-income countries, financial system does not have a positive effect on these economies. The study showed also that financial development exacerbates inequality of income distribution in countries with low and middle income; whereas for high-income countries, any improvement in the financial system resulted in a decrease in inequality. Copyright Springer Science+Business Media New York 2015

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  • Abdelhafidh Dhrifi, 2015. "Financial Development and the "Growth-Inequality-Poverty" Triangle," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 6(4), pages 1163-1176, December.
    • Handle: RePEc:spr:jknowl:v:6:y:2015:i:4:p:1163-1176
    DOI: 10.1007/s13132-014-0200-0
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    Cited by:

    1. Ebeh, Joy Eleojo & Awe, Abel, Ariyo, 2021. "Does Poverty Matters in Maternal Health and Output Growth Nexus in sub-Saharan African Countries? A Panel ARDL Approach," Noble International Journal of Economics and Financial Research, Noble Academic Publsiher, vol. 6(6), pages 119-130, December.
    2. Nasreddine Kaidi & Sami Mensi, 2020. "Financial Development, Income Inequality, and Poverty Reduction: Democratic Versus Autocratic Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(4), pages 1358-1381, December.
    3. Mcknight, Abigail, 2019. "Understanding the relationship between poverty, inequality and growth: a review of existing evidence," LSE Research Online Documents on Economics 103458, London School of Economics and Political Science, LSE Library.
    4. Dhrifi, Abdelhafidh & Jaziri, Raouf & Alnahdi, Saleh, 2020. "Does foreign direct investment and environmental degradation matter for poverty? Evidence from developing countries," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 13-21.
    5. Appiah, Michael & Frowne, Doreen Idan & Tetteh, Derrick, 2020. "Re-examining the Nexus Between Financial Development and Poverty Reduction: Evidence from Emerging Economies," Asian Journal of Applied Economics, Kasetsart University, Center for Applied Economics Research, vol. 27(2).
    6. Wale-Awe, Olawale & Evans, Olaniyi, 2023. "Financial inclusion through digital channels and the growth-inequality-poverty triangle: Evidence from Africa," MPRA Paper 119455, University Library of Munich, Germany.
    7. Nasreddine Kaidi & Sami Mensi, 2018. "Financial Development and Poverty Reduction: A Study of Middle-Income Countries," Working Papers 1216, Economic Research Forum, revised 05 Sep 2018.
    8. Ngoc Duc Lang & Ha Mai Tran & Giang Tra Nguyen & Duc Hong Vo, 2024. "An Untapped Instrument in the Fight Against Poverty: The Impacts of Financial Literacy on Poverty Worldwide," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 174(2), pages 657-695, September.
    9. Dhrifi, Abdelhafidh, 2018. "Health-care expenditures, economic growth and infant mortality: evidence from developed and developing countries," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    10. A. O Olohunlana & R. O. S Dauda, 2019. "Implications of financial development on poverty and inequality: Evidence from Nigeria," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 22(71), pages 42-59, March.
    11. Abigail McKnight, 2019. "Understanding the relationship between poverty, inequality and growth: a review of existing evidence," CASE Papers /216, Centre for Analysis of Social Exclusion, LSE.

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