| Summary: | 碩士 === 淡江大學 === 經濟學系碩士班 === 97 === This paper explores the connection between financial development and income inequality. Specifically, we examine whether the finance-inequality link varies with the degree of economic or financial development. By using a cross section of 61 countries during the period of 1960-2005, our threshold regressions results point out that the relationship between finance and inequality is regime specific, depending on real GDP per capita or financial development. In particular, countries with low income and less developed financial systems tend to experience higher income inequality and better financial development. By contrast, countries with high income and more developed financial systems tend to experience lower income inequality and better financial development. Our analysis thus implies that in addition to fiscal measures, the government may consider financial reforms as an alternative means to reduce income inequality.
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