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, G., Delbono, F., Karlström, P., Pastorello, S. (2019). Income inequality and banking crises: Testing the level hypothesis directly. JOURNAL OF MACROECONOMICS, 62, 1-16 [10.1016/j.jmacro.2018.08.007].
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.| File | Dimensione | Formato | |
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