Financial Development and the "Growth-Inequality-Poverty" Triangle: A Comparative Study between Developed and Developing Countries

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Author	Abdelhafidh DHRIFI
ISSN	2307-2466
On Pages	472-481
Volume No.	2
Issue No.	7
Issue Date	December 01, 2020
Publishing Date	December 01, 2020
Keywords	Financial development, growth, inequality, poverty, simultaneous equations model.

Abstract

The main objective of this paper is to study the effects of financial development on poverty reduction taking into account simultaneous effects on growth and inequality. In order to do so, we decided to make a comparative study between three groups of countries according to the chosen criterion income. We are going to build a model of simultaneous equations over the period 1990-2011. The results generated by this study has identified that financial development promotes economic growth and reduce poverty in middle-income countries and high income, whereas in low income countries financial system does not have a positive effect on these economies. The study showed also that financial development exacerbates inequality of income distribution in countries with low and middle income, while for high-income countries any improvement in the financial system resulted in a decrease in inequality.

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