The Nexus Between Financial Globalization and Income Inequality: The Case of Emerging Market Economies

We analyze the causality nexus between financial globalization and income inequality for 19 Emerging Market Economies. We use the panel bootstrap causality analysis. The dataset covers the period 1979-2012. The results indicate that there is a positive causality nexus between financial globalization and income inequality. Also, they show that Granger causality running from financial globalization to income inequality is seen in many countries such as Chile, China, Colombia, Egypt, India, Indonesia, Pakistan, and Singapore while there is Granger causality running from income inequality to financial globalization in Egypt and Iran Furthermore, there is bidirectional Granger causality in Malaysia, Philippines, and Thailand. The results are not consistent with the conventional wisdom.