Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/55340 
Year of Publication: 
2011
Series/Report no.: 
CESifo Working Paper No. 3687
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We analyze the link between financial development and income inequality for a broad unbalanced dataset of 138 developed and developing countries over the years 1960 to 2008. Using credit-to-GDP as measure of financial development, our results reject theoretical models predicting a negative impact of financial development on income inequality measured by the Gini coefficient. Controlling for country fixed effects and GDP per capita, we find that financial development has a positive effect on income inequality. These results are robust to different measures of financial development.
Subjects: 
financial development
income inequality
JEL: 
O15
O16
Document Type: 
Working Paper
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