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Distributional effects of crises : the role of financial transfers

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Author Info

  • Marina Halac
  • Sergio Schmukler

Abstract

Financial crises affect income distribution by way of different channels. The authors argue that financial transfers are an important channel which has been overlooked by the literature. They study the role of financial transfers by analyzing some of the most severe Latin American crises during the past decades (Chile 1981-83, Mexico 1994-95, Ecuador 1998-2000, Argentina 2001-02, and Uruguay 2002). First, the authors investigate transfers to the financial sector-those from nonparticipants to participants of the financial sector. Second, they explore who receives these financial transfers by identifying the winners and losers within the financial sector. Their analysis suggests that financial transfers during crises are large and expected to increase income inequality.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3173.

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Date of creation: 20 Nov 2003
Date of revision:
Handle: RePEc:wbk:wbrwps:3173

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Keywords: Financial Intermediation; Banks&Banking Reform; Economic Theory&Research; Payment Systems&Infrastructure; Financial Crisis Management&Restructuring; Banks&Banking Reform; Financial Crisis Management&Restructuring; Financial Intermediation; Financial Economics; Economic Theory&Research;

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References

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Citations

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Cited by:
  1. David McKenzie & Ernesto Schargrodsky, 2005. "Buying Less, But Shopping More: Changes In Consumption Patterns During A Crisis," Business School Working Papers buyinglessshop, Universidad Torcuato Di Tella.
  2. Montiel, Peter & Serven, Luis, 2004. "Macroeconomic stability in developing countries - How much is enough?," Policy Research Working Paper Series 3456, The World Bank.
  3. Demir, Firat, 2006. "Volatility of short term capital flows and socio-political instability in Argentina, Mexico and Turkey," MPRA Paper 1943, University Library of Munich, Germany.
  4. Feijen, Erik, 2005. "Do incumbents manipulate access to finance during banking crises?," Policy Research Working Paper Series 3660, The World Bank.
  5. Stijn Claessens & Erik Feijen, 2006. "Financial Sector Development and the Millennium Development Goals," World Bank Publications, The World Bank, number 7145, October.
  6. Martín González-Rozada, Mirta Molinari and Mario Virgolini, 2008. "The Economic Impact of Smoke-Free Laws on the Sales of Bars and Restaurants in Argentina," Business School Working Papers 2008-03, Universidad Torcuato Di Tella.

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