Financial development and income inequality: A meta-analysis

in Journal of Economic Surveys (2022)

The voluminous empirical research on the effect of financial development on income inequality has yielded mixed results. In this paper, we collect 2127 estimates reported in 116 published studies that ... [more ▼]

The voluminous empirical research on the effect of financial development on income inequality has yielded mixed results. In this paper, we collect 2127 estimates reported in 116 published studies that investigate the effect of financial development on income inequality. Although our initial tests for publication bias (which do not account for moderator variables) show that the current literature does not suffer from publication selectivity, once we control for a set of moderator variables, we find evidence of mild publication bias in favor of positive estimates (i.e., the current literature favors the publication of studies that find that financial development increases income inequality). In addition, our results suggest that the overall effect of financial development on income inequality is on average zero, but that its sign and magnitude depend systematically on various study characteristics. The characteristics of data and estimation methods, whether endogeneity is taken into account, the different measures of financial development and the inclusion of financial openness, inflation and income variables in the regressions matter significantly for the effect of financial development on inequality. [less ▲]

Wealth Inequality: A Survey

in Journal of Economic Surveys (2015), 29(4), 671-710

We survey the issues involved in comparing wealth distributions and measuring wealth inequality with illustrations from the Eurosystem Household Finance and Consumption Survey.

The normalized CES production function: theory and empirics

in JOURNAL OF ECONOMIC SURVEYS (2012), 26(5), 769-799

The elasticity of substitution between capital and labor and, in turn, the direction of technical change are critical parameters in many fields of economics. Until recently, though, the application of ... [more ▼]

The elasticity of substitution between capital and labor and, in turn, the direction of technical change are critical parameters in many fields of economics. Until recently, though, the application of production functions with specifically non-unitary substitution elasticities (i.e., non-CobbDouglas) was hampered by empirical and theoretical uncertainties. As recently revealed, normalization of production-technology systems holds out the promise of resolving many of those uncertainties. We survey and assess the intrinsic links between production (as conceptualized in a production function), factor substitution (as made most explicit in Constant Elasticity of Substitution functions) and normalization (defined by the fixing of baseline values for relevant variables). First, we recall how the normalized Constant Elasticity of Substitution function came into existence and what normalization implies for its formal properties. Then we deal with the key role of normalization in recent advances in the theory of business cycles and of economic growth. Next, we discuss the benefits normalization brings for empirical estimation and empirical growth research. Finally, we identify promising areas of future research. [less ▲]

Foreign Exchange Rate Expectations: Survey and Synthesis

in Journal of Economic Surveys (2008), 22