IDEAS home Printed from https://ideas.repec.org/p/imf/imfsdn/2020-001.html
   My bibliography  Save this paper

Finance and Inequality

Author

Listed:
  • Mr. Martin Cihak
  • Ms. Ratna Sahay

Abstract

The study examines empirical relationships between income inequality and three features of finance: depth (financial sector size relative to the economy), inclusion (access to and use of financial services by individuals and firms), and stability (absence of financial distress). Using new data covering a wide range of countries, the analysis finds that the financial sector can play a role in reducing inequality, complementing redistributive fiscal policy. By expanding the provision of financial services to low-income households and small businesses, it can serve as a powerful lever in helping create a more inclusive society but—if not well managed—it can amplify inequalities.

Suggested Citation

  • Mr. Martin Cihak & Ms. Ratna Sahay, 2020. "Finance and Inequality," IMF Staff Discussion Notes 2020/001, International Monetary Fund.
    • Handle: RePEc:imf:imfsdn:2020/001
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=45129
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shchepeleva, Maria & Stolbov, Mikhail & Weill, Laurent, 2022. "Has the Global Financial Crisis increased wealth inequality?," International Economics, Elsevier, vol. 169(C), pages 148-160.
    2. Georgescu, Oana-Maria & Martín, Diego Vila, 2021. "Do macroprudential measures increase inequality? Evidence from the euro area household survey," Working Paper Series 2567, European Central Bank.
    3. Ajide Folorunsho M., 2021. "Financial Inclusion and Labour Market Participation of Women in Selected Countries in Africa," Economics and Culture, Sciendo, vol. 18(1), pages 15-31, June.
    4. Herradi, Mehdi El & Leroy, Aurélien, 2022. "The rich, poor, and middle class: Banking crises and income distribution," Journal of International Money and Finance, Elsevier, vol. 127(C).
    5. Carlos Madeira, 2023. "Use of Financial Instruments among the Chilean households," Working Papers Central Bank of Chile 974, Central Bank of Chile.
    6. Park, Cyn-Young & Mercado, Rogelio, 2021. "Understanding Financial Inclusion: What Matters and How It Matters," ADBI Working Papers 1287, Asian Development Bank Institute.
    7. Margaret Rutendo Magwedere & Godfrey Marozva, 2022. "Financial Stability and Income Inequality in Developing Countries," Prague Economic Papers, Prague University of Economics and Business, vol. 2022(6), pages 464-481.
    8. Julia Bersch & Jean François Clevy & Naseem Muhammad & Mrs. Esther Perez Ruiz & Mr. Yorbol Yakhshilikov, 2021. "Fintech Potential for Remittance Transfers: A Central America Perspective," IMF Working Papers 2021/175, International Monetary Fund.
    9. Martin Hodula & Ngoc Anh Ngo, 2022. "Finance, growth and (macro)prudential policy: European evidence," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 49(2), pages 537-571, May.
    10. Jan Libich & Liam Lenten, 2022. "Hero or villain? The financial system in the 21st century," Journal of Economic Surveys, Wiley Blackwell, vol. 36(1), pages 3-40, February.
    11. Miyajima, Ken, 2022. "Mobile phone ownership and welfare: Evidence from South Africa’s household survey," World Development, Elsevier, vol. 154(C).
    12. Madeira, Carlos, 2023. "The evolution of consumption inequality and risk-insurance in Chile," Emerging Markets Review, Elsevier, vol. 54(C).
    13. Feghali, Khalil & Mora, Nada & Nassif, Pamela, 2021. "Financial inclusion, bank market structure, and financial stability: International evidence," The Quarterly Review of Economics and Finance, Elsevier, vol. 80(C), pages 236-257.
    14. de Moraes, Claudio Oliveira & Roquete, Raphael Moses & Gawryszewski, Gustavo, 2023. "Who needs cash? Digital finance and income inequality," The Quarterly Review of Economics and Finance, Elsevier, vol. 91(C), pages 84-93.
    15. Park, Sungmin & Kim, Young-Han, 2023. "The impact of macroprudential policy on inequality and implications for inclusive financial stability," Journal of Banking & Finance, Elsevier, vol. 146(C).
    16. Tekgüç, Hasan & Ünsal, Ezgi & Yeldan, A. Erinc, 2021. "Poverty and Income Distribution Incidence of the COVID-19 Outbreak: Investigating Socially Responsible Policy Alternatives for Turkey," Conference papers 333248, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imf:imfsdn:2020/001. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.