How is Financial Market Liberalization Influencing Income Inequality?

Inhaltsverzeichnis (Table of Contents)

• Introduction
• What are Liberalized Financial Markets?
• Hypotheses and Structure of the Paper
• Literature Review and Hypotheses
• Reasons for Financial Market Liberalization and Integration
• Capital Account Liberalization and Economic Growth
• Capital Account Liberalization and Economic Stability
• Capital Account Liberalization and Poverty / Income Inequality
• Quantitative Research
• Model Design
• Data
• Response Variable: Income Inequality
• Explanatory Variable: Capital Account Openness
• Explanatory Variable: Institutional Quality
• Explanatory Variable: Economic Development
• Logarithms, Polynomials, Lags, Binaries and Interaction Variables
• Regressions and Causality
• Interpretation of Basic Regressions
• Crises, CAL and Income Inequality
• Endogeneity and Instruments
• Endogeneity Calculations
• Quantitative Answers for Hypotheses
• Open Capital Accounts generally Increase Inequality
• Capital Account Liberalization leads to an especially high increase in income inequality if the institutional quality is low
• Sensitivity Analysis
• Adjustment for Outliers
• Alternative Proxies
• Discussion of the Results
• Summary of Results
• Limitations and Further Research
• Implications

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This study examines the relationship between financial market liberalization and income inequality. It focuses specifically on capital account liberalization (CAL) and investigates its impact on income inequality across various countries. The study aims to determine whether CAL generally increases income inequality and if this impact is particularly pronounced in countries with low institutional quality.

• Financial market liberalization and its impact on income inequality
• The role of capital account liberalization (CAL) in shaping income inequality
• The influence of institutional quality on the relationship between CAL and income inequality
• Empirical analysis of income inequality in various world regions
• Policy implications for mitigating the inequality effects of financial market liberalization

Zusammenfassung der Kapitel (Chapter Summaries)

• Introduction: This chapter introduces the research question, exploring the relationship between financial market liberalization and increasing income inequality. It defines financial market liberalization and outlines the study's hypotheses and structure.
• Literature Review and Hypotheses: This chapter reviews existing literature on financial market liberalization, highlighting its potential effects on economic growth, stability, and income inequality. It then derives the two main hypotheses investigated in the study.
• Quantitative Research: This chapter details the methodology used for the empirical analysis. It outlines the model design, data selection (including income inequality, CAL, institutional quality, and economic development), and regression techniques used to assess the relationship between CAL and income inequality.

Schlüsselwörter (Keywords)

This study delves into the complex relationship between financial market liberalization, capital account liberalization (CAL), and income inequality. It explores the influence of institutional quality on this relationship, utilizing empirical data from various world regions. Key terms include financial liberalization, capital account liberalization, income inequality, institutional quality, economic growth, economic stability, poverty, and policy implications.