Three Essays on Financial Development, Economic Growth and Income Inequality.

摘要

The issue of economic growth and income inequality is always the hottest topic among economists. Over the past decades to the onset of the global economic crisis, a large majority of OECD countries have experienced widen income inequality. More recently, the break out of the Occupy Wall Street Movement has rapid spread and recaptured much attention. One of the most driving themes is a country's economic growth and embarrassing income inequality; it also reflects a broad-based frustration about how the sophisticated financial development affects the overall economy. To understand the impact of financial development on economic growth and income distribution has more important implications than ever. This dissertation is an effort to study these issues with three studies.;In Study 1, a simplified version of Diamond and Dybvig (1983) model of liquid provision is embedded into a framework of overlapping-generations model. In the model, the agents are subject to idiosyncratic liquidity shocks, and have to make their own mind whether to hold the savings on hand or invest in a long-term illiquid technology and how to allocate. By comparing the autarky economy and the economy with financial intermediaries, our results suggest the existence of both benefits and costs of financial intermediaries and the net effects tend to differ with the development stage of the underlying economy.;In Study 2, the links between economic growth and income inequality are reexamined using a newly compiled panel dataset. This study mainly address three empirical questions: 1) Does inequality increase in the early stages of development and then decline when per capita income reaches a certain level? 2) Do countries with unequal income distribution experience slower economic growth than more egalitarian countries? 3) What might be the determinants of economic growth and income inequality, and whether they are simultaneously determined? Our results show that the links between economic growth and income inequality are quite complex and their determinants are not mutually exclusive.;In Study 3, the impacts of financial development on economic growth and income inequality are explored empirically. By collecting proxy variables measuring different aspects of financial development, this study tests 1) Is financial development pro-growth? In other words, does financial development always exert a positive impact on economic growth? 2) Is financial development pro-poor? By pro-poor, we mean whether financial development significantly improve income distribution by disproportionately boosting the incomes of the poor. Our results indicate that financial development is not always pro-growth, taking into account of country-specific effects, endogeneity and potential heteroskedasticity. In addition, after controlling for the overall growth, financial development is not pro-poor. It is more likely for the rich to get more benefits from both bank-based and market-based developments.