Distributional Effects of Crises: The Role of Financial Transfers
36 Pages Posted: 30 Dec 2004
Date Written: May 15, 2003
Financial crises affect income distribution via different channels. We argue that financial transfers is an important channel, which has been overlooked by the literature. By analyzing data from the Mexican (1994-1995) and Argentine (2001-2002) crises, we investigate two types of financial transfers. First, we study transfers to the financial sector, going from non-participants to participants of the financial sector. Second, we explore transfers within the financial sector, which are transfers among participants of the financial sector, as those from small to large and foreign depositors. Our analysis suggests that financial transfers increase income inequality.
Keywords: Financial crises, distributional effects, financial transfers, inequality, income distribution, Argentine crisis, Mexican crisis
JEL Classification: E44, E60, F41, G20, I32
Suggested Citation: Suggested Citation