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Cheng Zhou
 
''The impact of financial openness on income inequality''
( 2022, Vol. 42 No.4 )
 
 
This study empirically analyzes the impact of financial openness on income inequality using a sample of 68 countries from 1980 to 2019. The main finding is that financial openness expands income disparity by increasing the income share of high-income groups while decreasing the income share of low-income groups. In developing countries, financial openness has the largest positive impact on income inequality, emerging market countries are second, and developed countries are third. External shocks, which are transmitted through the interplay of the exchange rate and interest rate channels, exacerbate income inequality as a result of financial openness.
 
 
Keywords: Income inequality; Financial openness; Income quartile
JEL: F4 - Macroeconomic Aspects of International Trade and Finance: General
F3 - International Finance: General
 
Manuscript Received : Mar 22 2022 Manuscript Accepted : Dec 30 2022

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