The long-run relationship between finance and income inequality: Evidence from panel data
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We use heterogeneous panel cointegration techniques to examine the long-run effect of financial development on income inequality in a panel of 119 countries from 1980 to 2015. We include real GDP per capita in the cointegration relation and explicitly deal with cross-sectional de- pendence in the data that arises due to unobserved common factors. On average, financial de- velopment reduces income inequality in the long-run, with the result robust to different measures of finance and across country income groups.
| Original language | English |
|---|---|
| Article number | 101180 |
| Journal | Finance Research Letters |
| Volume | 32 |
| Early online date | 30 Apr 2019 |
| DOIs | |
| Publication status | Published - Jan 2020 |