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Do financial reforms help stabilize inequality?

Listed author(s):
  • Christopoulos, Dimitris
  • McAdam, Peter

We explore the relationship between financial reforms and income inequality using a panel of 29 countries in 1975–2005. We extend panel unit root tests to allow for the presence of some financial-reform covariates and further suggest an associated but novel, semi-parametric approach. Results demonstrate that although both gross and net Gini indices follow a unit root process, this picture can change when financial reform indices are accounted for. In particular, while gross Gini coefficients are generally not stabilized by financial reforms, net measures are (more likely to be). Thus financial reforms enacted in the presence of a strong safety net would seem preferable.

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File URL: http://www.sciencedirect.com/science/article/pii/S0261560616300390
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Article provided by Elsevier in its journal Journal of International Money and Finance.

Volume (Year): 70 (2017)
Issue (Month): C ()
Pages: 45-61

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Handle: RePEc:eee:jimfin:v:70:y:2017:i:c:p:45-61
DOI: 10.1016/j.jimonfin.2016.05.003
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/30443

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