v. Ehrlich, Maximilian; Seidel, Tobias (February 2015). Financial Development and Inequality in the Global Economy (Submitted) (CESifo Working Paper Series 5776). Munich: CESifo
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We build a heterogeneous-firms model with firm-specific wages and credit frictions to study the role of financial development for inequality in the global economy. If there are many small
firms, better access to external funds reduces wage inequality and unemployment. In contrast, if there are many high-productive firms (those that export), financial development may have opposite effects - especially if trade costs are low. In sum, the implications of financial development for inequality depend on the size distribution of firms and on the costs of exporting. Trade liberalization, however, raises inequality unambiguously.
Item Type: |
Working Paper |
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Division/Institute: |
03 Faculty of Business, Economics and Social Sciences > Department of Economics 03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics 03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics > Public Economics 11 Centers of Competence > Center for Regional Economic Development (CRED) |
UniBE Contributor: |
v. Ehrlich, Maximilian |
Subjects: |
300 Social sciences, sociology & anthropology > 330 Economics |
Series: |
CESifo Working Paper Series |
Publisher: |
CESifo |
Language: |
English |
Submitter: |
Simon Büchler |
Date Deposited: |
03 Aug 2017 13:42 |
Last Modified: |
01 Apr 2024 08:34 |
Uncontrolled Keywords: |
financial development, credit constraints, international trade, inequality |
JEL Classification: |
F160, F650 |
BORIS DOI: |
10.7892/boris.95008 |
URI: |
https://boris.unibe.ch/id/eprint/95008 |
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