Discussion Paper Details

Please find the details for DP13330 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Financial structure and income inequality

Author(s): Michael Brei, Giovanni Ferri and Leonardo Gambacorta

Publication Date: November 2018

Keyword(s): banks, Finance, financial markets and inequality

Programme Area(s): Financial Economics

Abstract: This paper empirically investigates the link between financial structure and income inequality. Using data for a panel of 97 economies over the period 1989-2012, we find that the relationship is not monotonic. Up to a point, more finance reduces income inequality. Beyond that point, inequality rises if finance is expanded via market-based financing, while it does not when finance grows via bank lending. These findings concur with a well-established literature indicating that deeper financial systems help reduce poverty and inequality in developing countries, but also with recent evidence of rising inequality in various financially advanced economies.

For full details and related downloads, please visit:

Bibliographic Reference

Brei, M, Ferri, G and Gambacorta, L. 2018. 'Financial structure and income inequality'. London, Centre for Economic Policy Research.