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    Financial Market Access and Capital Income Inequality


    Pellicer, Miquel (2008) Financial Market Access and Capital Income Inequality. Czech Journal of Economics and Finance (Finance a uver), 58 (11-12). pp. 554-575.

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    Abstract

    This paper explores the effect of broadening financial market access on inequality. I characterize in a parsimonious model of endogenous market participation how capital income inequality depends on financial market costs. A Kuznets curve type of relationship is uncovered under DARA utility. Data on the contribution of capital income to inequality (CKI) in eleven countries is presented against a measure of equity trading costs. Consistently with the model, during the last few decades of improving market access, the CKI has tended to increase where trading costs have been high, and to decrease where these costs have been low enough. The results imply that financial liberalization may have differential effects for inequality in advanced and in emerging economies.

    Item Type: Article
    Keywords: income inequality; household portfolio; financial liberalization;
    Academic Unit: Faculty of Science and Engineering > Electronic Engineering
    Item ID: 12820
    Depositing User: Miquel Pellicer
    Date Deposited: 27 Apr 2020 13:07
    Journal or Publication Title: Czech Journal of Economics and Finance (Finance a uver)
    Refereed: Yes
    URI:

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