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Research Article

The role of fiscal policy in the link between income inequality and banking crises

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Pages 1283-1287 | Published online: 16 Aug 2020
 

ABSTRACT

This paper explores the link between income inequality and banking crises, when inequality is affected by fiscal policy. Using a two-stage probit least squares method and a panel of 21 countries, spanning the period 1971–2017, the findings indicate that inequality impacts the probability of banking crises through budget deficits, followed by government expenses.

JEL CLASSIFICATION:

Disclosure statement

No potential conflict of interest was reported by the authors.

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