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How do Banking Crises Impact on Income Inequality?

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Abstract

We show that banking crises have an important effect on income distribution: inequality increases before banking crisis episodes and sharply decline 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, 2011. "How do Banking Crises Impact on Income Inequality?," NIPE Working Papers 30/2011, NIPE - Universidade do Minho.
    • Handle: RePEc:nip:nipewp:30/2011
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    References listed on IDEAS

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    1. Jong-eun Lee, 2010. "Inequality in the globalizing Asia," Applied Economics, Taylor & Francis Journals, vol. 42(23), pages 2975-2984.
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    6. Frederick Solt, 2009. "Standardizing the World Income Inequality Database," LIS Working papers 496, LIS Cross-National Data Center in Luxembourg.
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    8. Frederick Solt, 2009. "Standardizing the World Income Inequality Database," Social Science Quarterly, Southwestern Social Science Association, vol. 90(2), pages 231-242, June.
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    More about this item

    Keywords

    Inequality; banking crisis; financial depth; government size.;
    All these keywords.

    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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