This study examines the effect of financial development on income inequality in Iran for the period of 1971 to 2011using Johansen cointegration approach. To this end a financial development index has been constructed from six sub-indices including banking sector, non-banking financial sector, regulation and supervision, monetary sector and monetary policy, financial openness, and institutional sector.  The results indicated that banking sector, non-banking financial sector, regulation and supervision financial openness, and institutional sector are able to reduce Gini coefficient and improve income distribution. In this respect, while the development of banking sector has the greatest impact on income distribution in Iranâs economy, development of monetary sector has no significant impact on income improvement. According to these findings, quality of legal institutions, property rights, quality of bureaucracy and government responsibility affect the functioning of the financial system.
Zarra-Nezhad, M., & Hosseinpoor, A. (2014). The Effect of Financial Development on Income Inequality in Iranâs Economy. Journal of Econometric Modelling, 1(1), 1-19. doi: 10.22075/jem.2017.1494
MLA
Mansour Zarra-Nezhad; Abdolkarim Hosseinpoor. "The Effect of Financial Development on Income Inequality in Iranâs Economy", Journal of Econometric Modelling, 1, 1, 2014, 1-19. doi: 10.22075/jem.2017.1494
HARVARD
Zarra-Nezhad, M., Hosseinpoor, A. (2014). 'The Effect of Financial Development on Income Inequality in Iranâs Economy', Journal of Econometric Modelling, 1(1), pp. 1-19. doi: 10.22075/jem.2017.1494
VANCOUVER
Zarra-Nezhad, M., Hosseinpoor, A. The Effect of Financial Development on Income Inequality in Iranâs Economy. Journal of Econometric Modelling, 2014; 1(1): 1-19. doi: 10.22075/jem.2017.1494
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