Cross country evidence on financial development - income inequality link

Akbıyık, Ceren
This study analyzes the relationship between financial development and income inequality by using panel data of 60 developing and developed countries for the period 2000-2010. We find evidence for the linear negative relationship between financial development and income inequality which asserts that financial development reduces income inequality. We also find evidence supporting Kuznets inverted u-shaped hypothesis on development-income inequality link, except that for the developed countries where we find evidence for u-shaped hypothesis. It is also concluded that the panel is stationary without unit root, indicating that shocks on income inequality is not persistent.


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Citation Formats
C. Akbıyık, “Cross country evidence on financial development - income inequality link,” M.S. - Master of Science, Middle East Technical University, 2012.