Finance is good for the poor but it depends where you live

Johan Rewilak*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

I examine whether or not the incomes of the poor systematically grow with average incomes, and whether financial development enhances the incomes of the poorest quintile. Following the methodology of Dollar and Kraay (2002), I find, once extending Dollar and Kraay's data, their findings are robust to the Lucas critique and economic growth is important for poverty reduction universally. However, in comparison to other authors' work I show financial development aids the incomes of the poor in certain regions, whilst it may be detrimental in others. This proposes evidence against a "one size fits all" model adding a further contribution to the literature on financial development and poverty.

Original languageEnglish
Pages (from-to)1451-1459
Number of pages9
JournalJournal of Banking and Finance
Volume37
Issue number5
DOIs
Publication statusPublished - 1 May 2013

Bibliographical note

© 2012 Elsevier B.V. Open access under CC BY license.

Keywords

  • Economic growth
  • Financial development
  • Poverty

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