Abstract

GOMEZ RODRIGUEZ, Tomás; RIOS BOLIVAR, Humberto  and  AALI BUJARI, Ali. Financial development and income inequality, the Latin America case. Contad. Adm [online]. 2019, vol.64, n.4, e132.  Epub May 12, 2020. ISSN 0186-1042.  https://doi.org/10.22201/fca.24488410e.2019.1902.

The relationship between financial development and income inequality was analyzed using a database comprising 13 Latin American countries, covering a period from 1990 to 2015. The main variable is financial development, which is measured through the credit to GDP ratio. On the other hand, to measure income inequality, the Gini index was used. To carry out the analysis, the following econometric methods were used: fixed effects, estimated generalized least squares and the method of generalized moments together with estimated generalized least squares. In addition, the following control variables were used: GDP per capita, government expenditure to GDP ratio, trade opening, the inflation rate and the population. It was found that the development of the financial system increases income inequality. These results were validated using different econometric specifications.

Keywords : Financial development; Income inequality; Latin America.