Munich Personal RePEc Archive

Does income inequality contribute to credit cycles?

Malinen, Tuomas (2014): Does income inequality contribute to credit cycles?

[img]
Preview
PDF
MPRA_paper_52831.pdf

Download (169kB) | Preview

Abstract

Recent literature has presented arguments linking income inequality on the financial crash of 2007 - 2009. One proposed channel is expected to work through bank credit. We analyze the relationship between income inequality and bank credit in panel cointegration framework, and find that they have a long-run dependency relationship. Results show that income inequality has contributed to the increase of bank credit in developed economies after the Second World War.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.