Essays on financialization, income inequality and growth

Date

2025-4

Author

Gülcü, Abdullah

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This thesis consists of three essays on financialization, income inequality and growth. The first essay investigates the nonlinear impact of international financial integration (IFI) on income inequality by applying data-driven panel fixed effect threshold procedure of Hansen (1999) for a large set of advanced economies (AE) and emerging market and developing economies (EMDE). We also decompose IFI as capital inflows and capital outflows. Our empirical findings reveal that the relationship between IFI and inequality is driven by both capital inflows and outflows in AE while it is determined by capital inflows in EMDE. The second essay examines whether the effect of trade openness on growth may change with the prevailing de facto exchange rate regimes (ERRs) in EMDE by employing the panel fixed effect threshold method. The estimation results imply that trade openness promotes growth in more rigid ERRs prevailing episodes. We also decompose trade openness as export and import to investigate the main driving force of that relation. The estimation results indicate that it is due to the joint effects of both exports and imports. The third essay assesses whether there exists a nonlinear long-run relationship between credit and economic activity, depending on the magnitude of the credit growth in Türkiye. To this end, we employ multiple threshold nonlinear ARDL (MT-NARDL) model. The results reveal noteworthy nonlinear patterns in the data, suggesting that excessively high or low levels of credit growth might disrupt the interplay between credit and economic activity while moderate credit growth promotes the relationship.

Subject Keywords

Financialization, Inequality, Growth, Exchange Rate Regime, Credit

URI

https://hdl.handle.net/11511/114100

Collections

Graduate School of Social Sciences, Thesis