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The effect of financial deepening on inequality: Some international evidence

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  • Hamori, Shigeyuki
  • Hashiguchi, Yoshihiro

Abstract

This paper uses an unbalanced panel data analysis of 126 countries for the period 1963–2002 to analyze the effects of financial deepening on inequality. The principal findings can be summarized as follows: (1) financial deepening reduces inequality; (2) economic growth reduces the equalizing effects of financial deepening; (3) inequality increases with an increase in trade openness; (4) the disequalizing effects of trade openness decrease as a country grows; (5) financial deepening and trade openness therefore have asymmetric effects on inequality; and (6) these effects are robust to the choice of financial variables, inequality measures, and model specifications.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Asian Economics.

Volume (Year): 23 (2012)
Issue (Month): 4 ()
Pages: 353-359

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Handle: RePEc:eee:asieco:v:23:y:2012:i:4:p:353-359

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Web page: http://www.elsevier.com/locate/asieco

Related research

Keywords: Financial deepening; Inequality; Equalizing effect; Dynamic GMM;

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References

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Cited by:
  1. Muhammad, Shahbaz & Tiwari, Aviral & Reza, Sherafatian-Jahromi, 2012. "Financial Development and Income Inequality: Is there any Financial Kuznets curve in Iran?," MPRA Paper 40899, University Library of Munich, Germany, revised 26 Aug 2012.

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