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Finance and Inequality: How Does Globalization Change Their Relationship?

  • Kunieda, Takuma
  • Okada, Keisuke
  • Shibata, Akihisa

This research demonstrates that international financial integration changes the way in which financial development affects inequality within a country. Specifically, both the cross-country analysis and the dynamic panel data analysis using data collected from more than 100 countries provide evidence indicating that if the financial market of a country is highly open to the world market, financial development widens inequality within that country, whereas if the financial market of a country is highly closed to the world market, financial development narrows inequality within that country. Our theoretical framework provides a possible explanation for our empirical findings.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 35358.

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Date of creation: 07 Dec 2011
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Handle: RePEc:pra:mprapa:35358
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