Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/148973 
Year of Publication: 
2016
Series/Report no.: 
KOF Working Papers No. 410
Publisher: 
ETH Zurich, KOF Swiss Economic Institute, Zurich
Abstract: 
Using a panel fixed effects model for a sample of 121 countries covering 1975-2005, we examine how financial development, financial liberalization and banking crises are related to income inequality. In contrast with most previous work, our results suggest that all finance variables increase income inequality. The level of financial development conditions the impact of financial liberalization on inequality. Also the quality of political institutions conditions the impact of financial liberalization on income inequality, in contrast to the quality of economic institutions. Our main findings are robust for using random effects, cross]country regressions and legal origin as instrument for financial development.
Subjects: 
income inequality
financial liberalization
financial sector size
financial crises
political institutions
JEL: 
D31
D63
F02
O11
O15
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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