Distributional Effects of Crises: The Financial Channel

World Bank Policy Research Working Paper No. 3173

59 Pages Posted: 16 Jul 2011

See all articles by Marina C. Halac

Marina C. Halac

affiliation not provided to SSRN

Sergio L. Schmukler

World Bank - Development Research Group (DECRG)

Date Written: June 1, 2004

Abstract

Financial crises affect income distribution via different channels. This paper argues that there is an important channel overlooked by the literature, namely the financial channel. We study how this channel operates by analyzing data from several Latin American countries, including Argentina, Bolivia, Chile, Ecuador, Mexico, Peru, and Uruguay. First, we investigate financial transfers from non-participants to participants of the financial sector. Second, we explore who receives these transfers and what other reallocations occur within the financial sector. Our analysis shows that financial redistributions during crises are large, benefiting the rich and hurting the poor.

Keywords: Financial crises, distributional effects, financial transfers, inequality, income distribution, access to finance

JEL Classification: E44, E60, F41, G20, I32

Suggested Citation

Halac, Marina C. and Schmukler, Sergio, Distributional Effects of Crises: The Financial Channel (June 1, 2004). World Bank Policy Research Working Paper No. 3173. Available at SSRN: https://ssrn.com/abstract=559622 or http://dx.doi.org/10.2139/ssrn.559622

Marina C. Halac

affiliation not provided to SSRN ( email )

Sergio Schmukler (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN MC 3-301
Washington, DC 20433
United States
202-458-4167 (Phone)
202-522-3518 (Fax)

HOME PAGE: http://www.worldbank.org/en/about/people/s/sergio-schmukler

Register to save articles to
your library

Register

Paper statistics

Downloads
151
Abstract Views
1,460
rank
192,082
PlumX Metrics