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Journal Articles Economics Letters Year : 2020

Do rising top incomes fuel credit expansion?


This paper provides an empirical assessment of the effect of income inequality on credit dynamics in 12 advanced economies over the period 1948-2015. We use foreign Communist influence as an instrument to identify exogenous variation in inequality and estimate the dynamic effect of a top income shock on credit over GDP. The results suggest that the evolution of top incomes has persistent effects on credit expansion, especially for mortgage and business loans.
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hal-03002536 , version 1 (12-11-2020)



Mehdi El Herradi, Aurélien Leroy. Do rising top incomes fuel credit expansion?. Economics Letters, 2020, 196, pp.109539. ⟨10.1016/j.econlet.2020.109539⟩. ⟨hal-03002536⟩
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