The Effect of Financial Development on Income Inequality An Empirical Study of Developing Countries
Author: Hafiza Sadaf Zahra

We investigate the effect of financial development on income inequality in case of developing countries over the period 1991-2015. The paper use the Auto Regressive Distributed Lag (ARDL) testing approach and correlation analysis to investigate the long run relationship, the error correction model (ECM) apply for the short run relationship, However, stationary of the properties also check for the unit root. The finding shows financial development reduces the income inequality in long run while the results are different in short run, means financial development have positive effect on income inequality (financial development increases the income inequality in short run). The control variables are trade openness, population growth, government final consumption and expenditure, inflation. The result strongly supported the negative linear relationships while the result do not in favor of an inverted u-shaped relationship. Supervisor:- Dr. Saud Ahmad Khan

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Keywords : Developing Countries, Income Inequality, The Effect of Financial Development
Supervisor: Saud Ahmed Khan

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