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How do banking crises impact on income inequality?

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  • Luca Agnello
  • Ricardo M. Sousa

Abstract

We show that banking crises have an important effect on income distribution: inequality increases before banking crisis episodes and sharply declines afterwards. We also find that, while a large government size does not per se seem to reduce inequality, a rise in financial depth (i.e. better access to credit provided by the banking sector) contributes to a more equal distribution of income.

Suggested Citation

  • Luca Agnello & Ricardo M. Sousa, 2012. "How do banking crises impact on income inequality?," Applied Economics Letters, Taylor & Francis Journals, vol. 19(15), pages 1425-1429, October.
    • Handle: RePEc:taf:apeclt:v:19:y:2012:i:15:p:1425-1429
    DOI: 10.1080/13504851.2011.631885
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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