IDEAS home Printed from https://ideas.repec.org/a/dse/indecr/0049.html
   My bibliography  Save this article

Does Financial Sector Development Increase Income Inequality? Some Econometric Evidence from Bangladesh

Author

Listed:
  • WAHID, ABU N.M.

    (Tennessee State University)

  • SHAHBAZ, MUHAMMAD

    (COMSATS Institute of Information Technology, Lahore, Pakistan)

  • SHAH, MEHMOOD

    (University of Management and Technology, Lahore, Pakistan)

  • SALAHUDDIN, MOHAMMAD

    (Southeast University Banani, Dhaka, Bangladesh)

Abstract

This paper is an attempt to examine the relationship between financial development and income inequality. In doing so, we have used Bangladeshi data for the period 1985-2006. We have employed Autoregressive Distributed Lag (ARDL) methodology for cointegration. We have also carried out sensitivity analysis and stability tests. Our findings suggest that financial development increases income inequality. Economic growth seems to equalize the income distribution. Inflation and trade openness also worsen income inequality. Finally, social spending increases income inequality in the country over the long run. This study provides new directions for policy makers to reduce income inequality to share the fruits of economic development among the wider spectrum of the society.

Suggested Citation

  • Wahid, Abu N.M. & Shahbaz, Muhammad & Shah, Mehmood & Salahuddin, Mohammad, 2012. "Does Financial Sector Development Increase Income Inequality? Some Econometric Evidence from Bangladesh," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 47(1), pages 89-107.
  • Handle: RePEc:dse:indecr:0049
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

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


    Cited by:

    1. repec:taf:applec:v:49:y:2017:i:52:p:5337-5351 is not listed on IDEAS
    2. Muhammad Shahbaz & Faridul Islam, 2011. "Financial Development And Income Inequality In Pakistan: An Application Of Ardl Approach," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 36(1), pages 35-58, March.
    3. Muhammad Shahbaz & Talat Afza & Muhammad Shahbaz Shabbir, 2013. "Financial Development, Domestic Savings and Poverty Reduction in Pakistan: Using Cointegration and Granger Causality Analysis," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 1(5), pages 59-73, May.
    4. Muhammad Shahbaz & Mita Bhattacharya & Mantu Kumar Mahalik, 2017. "Finance and income inequality in Kazakhstan: evidence since transition with policy suggestions," Applied Economics, Taylor & Francis Journals, vol. 49(52), pages 5337-5351, November.

    More about this item

    Keywords

    Financial Sector; Development; Trade Openness; Income Inequality; Bangladesh;

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade

    Statistics

    Access and download statistics

    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:dse:indecr:0049. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Pami Dua). General contact details of provider: http://edirc.repec.org/data/deudein.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.