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Finance and Wealth Inequality

Author

Listed:
  • Iftekhar Hasan

    (Fordham University
    Bank of Finland)

  • Roman Horvath

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic)

  • Jan Mares

    () (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic)

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 matter 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

  • Iftekhar Hasan & Roman Horvath & Jan Mares, 2018. "Finance and Wealth Inequality," Working Papers IES 2018/35, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Dec 2018.
  • Handle: RePEc:fau:wpaper:wp2018_35
    as

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    File URL: http://ies.fsv.cuni.cz/sci/publication/show/id/5945/lang/cs
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    More about this item

    Keywords

    Wealth inequality; finance; Bayesian model averaging;

    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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