We perform an empirical analysis to investigate the relationship between income inequality and the occurrence of banking crises on a panel of 33 advanced countries in the period 1970–2011. Differently from other empirical studies, we focus on levels rather than growth rates of income inequality. We find a statistically significant and positive relationship between the value of the Gini index and the probability of banking crises. This result is confirmed when income distribution is summarized by the top 1% income share.

Income inequality and banking crises: Testing the level hypothesis directly

Bellettini, Giorgio;Delbono, Flavio;Pastorello, Sergio
2019

Abstract

We perform an empirical analysis to investigate the relationship between income inequality and the occurrence of banking crises on a panel of 33 advanced countries in the period 1970–2011. Differently from other empirical studies, we focus on levels rather than growth rates of income inequality. We find a statistically significant and positive relationship between the value of the Gini index and the probability of banking crises. This result is confirmed when income distribution is summarized by the top 1% income share.
Bellettini, Giorgio; Delbono, Flavio; Karlström, Peter; Pastorello, Sergio
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11585/675421
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