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<p>This paper examines the empirical relationship between institutions, particularly financial institutions, and wealth inequality using a global panel data set for the period 2010–2016. We conduct a dynamic econometric analysis of these relationships based on the Credit Suisse and World Bank data. Our results reveal that control of corruption and government effectiveness do not have statistically significant effects on wealth inequality. However, the findings indicate an unfavourable effect of domestic credit on wealth inequality as measured by the Gini coefficient for wealth. The long-run effect of domestic credit is persistent and cumulates over time. We also find evidence of relationships between wealth inequality on one hand, and inflation rate, employment in agriculture and government expenditure on the other. The findings imply that policy makers need to re-examine the role and rules in the financial intermediation sector to address the issue of wealth inequality and equal opportunities.</p>
</abstract>

This paper examines the empirical relationship between institutions, particularly financial institutions, and wealth inequality using a global panel data set for the period 2010–2016. We conduct a dynamic econometric analysis of these relationships based on the Credit Suisse and World Bank data. Our results reveal that control of corruption and government effectiveness do not have statistically significant effects on wealth inequality. However, the findings indicate an unfavourable effect of domestic credit on wealth inequality as measured by the Gini coefficient for wealth. The long-run effect of domestic credit is persistent and cumulates over time. We also find evidence of relationships between wealth inequality on one hand, and inflation rate, employment in agriculture and government expenditure on the other. The findings imply that policy makers need to re-examine the role and rules in the financial intermediation sector to address the issue of wealth inequality and equal opportunities.

Wealth Inequality and Institutional Development: Macroeconometric Evidence from a Global Sample

University of Ljubljana & Institute for Economic Research

South East European Journal of Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

This paper examines the empirical relationship between institutions, particularly financial institutions, and wealth inequality using a global panel data set...

Wealth Inequality and Institutional Development: Macroeconometric Evidence from a Global Sample

Published Online: Jun 09, 2023

Page range: 100 - 114

DOI: https://doi.org/10.2478/jeb-2023-0008

Keywords
wealth inequality, institutions, financial development, financial intermediation, dynamic panel data analysis

© 2023 Rijad Kovač et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Wealth Inequality and Institutional Development: Macroeconometric Evidence from a Global Sample

Published Online: Jun 09, 2023

Page range: 100 - 114

DOI: https://doi.org/10.2478/jeb-2023-0008

Keywordswealth inequality, institutions, financial development, financial intermediation, dynamic panel data analysis

© 2023 Rijad Kovač et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Keywords
wealth inequality, institutions, financial development, financial intermediation, dynamic panel data analysis