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Distributional effects of crises : the role of financial transfers

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  • Marina Halac
  • Sergio Schmukler

Abstract

Financial crises affect income distribution by way of different channels. The authors argue that financial transfers are an important channel which has been overlooked by the literature. They study the role of financial transfers by analyzing some of the most severe Latin American crises during the past decades (Chile 1981-83, Mexico 1994-95, Ecuador 1998-2000, Argentina 2001-02, and Uruguay 2002). First, the authors investigate transfers to the financial sector-those from nonparticipants to participants of the financial sector. Second, they explore who receives these financial transfers by identifying the winners and losers within the financial sector. Their analysis suggests that financial transfers during crises are large and expected to increase income inequality.

Suggested Citation

  • Marina Halac & Sergio Schmukler, 2003. "Distributional effects of crises : the role of financial transfers," Policy Research Working Paper Series 3173, The World Bank.
    • Handle: RePEc:wbk:wbrwps:3173
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    4. David McKenzie & Ernesto Schargrodsky, 2005. "Buying Less, But Shopping More: Changes In Consumption Patterns During A Crisis," Business School Working Papers buyinglessshop, Universidad Torcuato Di Tella.
    5. Sergio L. Schmukler, 2004. "Financial globalization: gain and pain for developing countries," Economic Review, Federal Reserve Bank of Atlanta, vol. 89(Q 2), pages 39-66.
    6. Martín González-Rozada, Mirta Molinari and Mario Virgolini, 2008. "The Economic Impact of Smoke-Free Laws on the Sales of Bars and Restaurants in Argentina," Business School Working Papers 2008-03, Universidad Torcuato Di Tella.
    7. Recalde, Marina & Ramos-Martin, Jesús, 2012. "Going beyond energy intensity to understand the energy metabolism of nations: The case of Argentina," Energy, Elsevier, vol. 37(1), pages 122-132.
    8. Demir, Firat, 2006. "Volatility of short term capital flows and socio-political instability in Argentina, Mexico and Turkey," MPRA Paper 1943, University Library of Munich, Germany.
    9. Susie Lee & Ingmar Schumacher, 2011. "When does financial sector (in)stability induce financial reforms?," Working Papers hal-00637954, HAL.
    10. Perotti, Roberto, 2007. "Fiscal policy in developing countries : a framework and some questions," Policy Research Working Paper Series 4365, The World Bank.
    11. Peter Montiel & Luis Servén, 2006. "Macroeconomic Stability in Developing Countries: How Much Is Enough?," The World Bank Research Observer, World Bank, vol. 21(2), pages 151-178.
    12. Fiorio, Carlo V. & Saget, Catherine., 2010. "Reducing or aggravating inequality? : Preliminary findings from the 2008 financial crisis," ILO Working Papers 994564873402676, International Labour Organization.
    13. Feijen, Erik, 2005. "Do incumbents manipulate access to finance during banking crises?," Policy Research Working Paper Series 3660, The World Bank.
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    15. Stijn Claessens & Erik Feijen, 2006. "Financial Sector Development and the Millennium Development Goals," World Bank Publications - Books, The World Bank Group, number 7145.
    16. Saibal Ghosh, 2013. "The economics and politics of output volatility: evidence from Indian states," International Review of Applied Economics, Taylor & Francis Journals, vol. 27(1), pages 110-134, January.

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