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Inequality and crises revisited

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  • Salvatore Morelli

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  • Anthony Atkinson

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Abstract

Recent debate has suggested that growing levels or high levels of inequality may be systematically associated with the occurrence of banking crises. Using the updated version of the Chartbook of Economic Inequality, this paper provides new empirical evidence on the ‘level’ hypothesis and reassesses the empirical validity of the ‘growth’ hypothesis. In line with previous work, the empirical analysis on the entire set of countries and years under investigation does not provide any conclusive and compelling statistical support to either of the hypotheses. However, the apparent statistical insignificance of the findings does not rule out the economic relevance of the question at hand, given that the hypotheses cannot be rejected for important crises and countries such as the US and the UK. Hence, the overall evidence is far from being conclusive and there are several reasons to shed further light on this important research topic. Copyright Springer International Publishing Switzerland 2015

Suggested Citation

  • Salvatore Morelli & Anthony Atkinson, 2015. "Inequality and crises revisited," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 32(1), pages 31-51, April.
  • Handle: RePEc:spr:epolit:v:32:y:2015:i:1:p:31-51
    DOI: 10.1007/s40888-015-0006-y
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. David Loschiavo, 2016. "Household debt and income inequality: evidence from Italian survey data," Temi di discussione (Economic working papers) 1095, Bank of Italy, Economic Research and International Relations Area.
    2. Yamarik, Steven & El-Shagi, Makram & Yamashiro, Guy, 2016. "Does inequality lead to credit growth? Testing the Rajan hypothesis using state-level data," Economics Letters, Elsevier, vol. 148(C), pages 63-67.
    3. Peña, Guillermo, 2016. "The determinants of banking crises: Further evidence," MPRA Paper 70093, University Library of Munich, Germany.
    4. Dietrich Stauffer, 2016. "Income inequality in the 21st century — A biased summary of Piketty’s capital in the twenty-first century," International Journal of Modern Physics C (IJMPC), World Scientific Publishing Co. Pte. Ltd., vol. 27(02), pages 1-6, February.
    5. Basu, Kaushik, 2016. "Globalization of labor markets and the growth prospects of nations," Journal of Policy Modeling, Elsevier, vol. 38(4), pages 656-669.
    6. Tanadej Vechsuruck, 2017. "A Global Analysis of Income Distribution and Capacity Utilization Interactions: The Structuralist View JEL Classification: C23, D3, O11, O47," Working Paper Series, Department of Economics, University of Utah 2017_08, University of Utah, Department of Economics.
    7. Bogliacino, Francesco & Rojas Lozano, Daniel, 2017. "The evolution of inequality in Latin America in the 21st century: Patterns, drivers and causal hypotheses," MPRA Paper 77803, University Library of Munich, Germany.
    8. Florida, Richard & Mellander, Charlotta, 2017. "Innovation, Skill, and Economic Segregation," Working Paper Series in Economics and Institutions of Innovation 456, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    9. Bartling Björn & Grieder Manuel & Zehnder Christian, 2014. "Does competition justify inequality?," ECON - Working Papers 158, Department of Economics - University of Zurich, revised Nov 2015.
    10. Ben Etheridge, 2016. "Sell, Friedrich L.: The new economics of income distribution: introducing equilibrium concepts into a contested field," Journal of Economics, Springer, vol. 119(2), pages 171-173, October.
    11. Jan Behringer & Sabine Stephan & Thomas Theobald, 2017. "Macroeconomic factors behind financial instability," IMK Working Paper 178-2017, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    12. repec:kap:jecinq:v:16:y:2018:i:2:d:10.1007_s10888-018-9387-9 is not listed on IDEAS
    13. Murat Arsel & Bhaskar Vira, 2015. "Forum 2015," Development and Change, International Institute of Social Studies, vol. 46(4), pages 762-776, July.
    14. Rémi Bazillier & Jérôme Héricourt & Samuel Ligonnière, 2017. "Structure of Income Inequality and Household Leverage: Theory and Cross-Country Evidence," Working Papers 2017-01, CEPII research center.

    More about this item

    Keywords

    Inequality; Financial crisis; Top income shares; Poverty; Wealth; D31; D39; G01;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D39 - Microeconomics - - Distribution - - - Other

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