WHAT CAUSES INCOME INEQUALITY: ECONOMIC GROWTH OR FINANCIAL DEVELOPMENT?

Abstract

The paper investigates the linkage between growth, finance and inequality in the light of inverted-U hypothesis in the European Union member countries in the period 1995-2018. The findings of the multiple equations analysis indicate that economic growth and financial development act together, implying that growth boosts finance and vice versa. In addition, while the paper does not support the Kuznets hypothesis, the findings confirm the Greenwood-Jovanovic hypothesis, suggesting that the linkage between financial development and inequality is quadratic. That is to say, in the first phase of development, development of the financial markets is related to income inequality positively, however beyond the threshold level of finance, the linkage between finance and inequality becomes negative.

Keywords

• Economic Growth
• Financial Development
• Income Inequality
• Inverted-U Hypothesis
• Simultaneous Equation System

Gelir Eşitsizliğine Sebep Olan Nedir: Ekonomik Büyüme mi Yoksa Finansal Kalkınma mı?

Abstract

Bu çalışma, ters-U hipotezi bağlamında büyüme, finans ve eşitsizlik arasındaki ilişkileri Avrupa Birliği’ne üye ülkeler bağlamında 1995-2018 periyodu itibariyle araştırmaktadır. Çoklu denklem analiz bulguları, ekonomik büyüme ve finansal kalkınma sürecinin birlikte hareket ettiğini, bir diğer deyişle ekonomik büyümenin finansal kalkınmayı ve finansal kalkınmanın da büyümeyi hızlandırdığını ortaya koymuştur. İlaveten çalışma, Kuznets hipotezini desteklememekle birlikte, bulgular finansal kalkınma ve eşitsizlik arasındaki ilişkilerin kuadratik olduğunu öne süren Greenwood-Jovanovic hipotezinin geçerli olduğunu teyit etmiştir. Bir başka şekilde ifade etmek gerekirse, kalkınma sürecinin ilk safhasında finansal piyasaların gelişim sürecinin gelir eşitsizliği ile pozitif yönlü bir ilişki içinde olduğu, ancak finansal sistemin belirli bir eşik değerini aşmasını takiben finans ve eşitsizlik arasındaki ilişkilerin negatif olduğu bulunmuştur.

Keywords

• Ekonomik Büyüme
• Finansal Kalkınma
• Gelir Eşitsizliği
• Ters-U Hipotezi
• Eşanlı Denklem Sistemi

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