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Economic Growth, Financial Development and Income Inequality

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  • Donghyun Park

Abstract

The central objective of the paper is to empirically examine the relationship between financial development and income inequality. Theoretically, there are grounds for both a positive and negative relationship between the two variables. The finding is that financial development contributes to reducing inequality up to a point, but as financial development proceeds further, it contributes to greater inequality. It is found that when the ratio of primary schooling to total schooling increases and law and order improves, financial development becomes more effective in reducing inequality.

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  • Donghyun Park, 2015. "Economic Growth, Financial Development and Income Inequality," Working Papers id:7247, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:7247
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    References listed on IDEAS

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    4. repec:hal:pseose:halshs-00944873 is not listed on IDEAS
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    6. Papanek, Gustav F. & Kyn, Oldrich, 1986. "The effect on income distribution of development, the growth rate and economic strategy," Journal of Development Economics, Elsevier, vol. 23(1), pages 55-65, September.
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    Cited by:

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    2. Asif Sajid & Amjad Ali, 2018. "Inclusive Growth and Macroeconomic Situations in South Asia: An Empirical Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 7(3), pages 97-109, September.
    3. Seven, Unal & Coskun, Yener, 2016. "Does financial development reduce income inequality and poverty? Evidence from emerging countries," Emerging Markets Review, Elsevier, vol. 26(C), pages 34-63.
    4. Nokulunga Mbona, 2022. "Impacts of Overall Financial Development, Access and Depth on Income Inequality," Economies, MDPI, vol. 10(5), pages 1-23, May.
    5. Sugiyanto Catur & Yolanda Zefania, 2020. "The Effect of Financial Deepening on Economic Growth, Inequality, and Poverty: Evidence from 73 Countries," South East European Journal of Economics and Business, Sciendo, vol. 15(2), pages 15-27, December.
    6. Thierno Thioune, 2017. "Financial Instability and Inequality Dynamics in the WAEMU," Econometric Research in Finance, SGH Warsaw School of Economics, Collegium of Economic Analysis, vol. 2(1), pages 43-62, June.
    7. Yi-Xun Pang & Sin-Huei Ng & Wei-Theng Lau, 2022. "Digital Cashless Payments and Economic Growth: Evidence from CPMI Countries," Capital Markets Review, Malaysian Finance Association, vol. 30(2), pages 63-89.

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