Inequality and Crises Revisited

Economia Politica - Journal of Institutional and Analytical Economics, Forthcoming

24 Pages Posted: 3 Apr 2015

See all articles by Salvatore Morelli

Salvatore Morelli

The Graduate Center - CUNY

A. B. Atkinson

University of Oxford - Nuffield College of Medicine

Date Written: February 1, 2015

Abstract

Recent debate has suggested that growing levels or high levels of inequality may be systematically associated with the occurrence of banking crises. Using the updated version of the Chartbook of Economic Inequality, this paper provides new empirical evidence on the 'level' hypothesis and reassesses the empirical validity of the 'growth' hypothesis. In line with previous work, the empirical analysis on the entire set of countries and years under investigation does not provide any conclusive and compelling statistical support to either of the hypotheses. However, the apparent statistical insignificance of the findings does not rule out the economic relevance of the question at hand, given that the hypotheses cannot be rejected for important crises and countries such as the US and the UK. Hence, the overall evidence is far from being conclusive and there are several reasons to shed further light on this important research topic.

Keywords: inequality, banking crisis, crisis, top income shares, Gini, Poverty

JEL Classification: D31, D39

Suggested Citation

Morelli, Salvatore and Atkinson, A. B., Inequality and Crises Revisited (February 1, 2015). Economia Politica - Journal of Institutional and Analytical Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2588583

Salvatore Morelli (Contact Author)

The Graduate Center - CUNY ( email )

695 Park Avenue
New York, NY 10021
United States

A. B. Atkinson

University of Oxford - Nuffield College of Medicine ( email )

New Road
Oxford, OX1 1NF
United Kingdom

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