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Finance and wealth inequality

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  • Hasan, Iftekhar
  • Horvath, Roman
  • Mares, Jan

Abstract

Using a global sample, this paper investigates the determinants of wealth inequality capturing various economic, financial, political, institutional, and geographical indicators. Using instrumental variable Bayesian model averaging, it reveals that only a handful of indicators robustly matters and finance plays a key role. It reports that while financial depth increases wealth inequality, efficiency and access to finance reduce inequality. In addition, redistribution and education are associated with lower inequality whereas wars and openness to international trade contribute to greater wealth inequality.

Suggested Citation

  • Hasan, Iftekhar & Horvath, Roman & Mares, Jan, 2020. "Finance and wealth inequality," Journal of International Money and Finance, Elsevier, vol. 108(C).
  • Handle: RePEc:eee:jimfin:v:108:y:2020:i:c:s0261560620300723
    DOI: 10.1016/j.jimonfin.2020.102161
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    More about this item

    Keywords

    Wealth inequality; Finance; Bayesian model averaging;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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