In theory, the principal purpose of the financial sector is to allocate capital efficiently. So it would seem intuitive that a bigger financial sector would allocate capital better and support more growth. Studies have tended to bolster this idea, but in such a heterogeneous area as finance, it is reasonable to wonder if all activities are equally useful to society. In this innovative research, economists Sami Ben Naceur and RuiXin Zhang gauge financial development’s impacts on poverty and inequity. getAbstract suggests this scholarly text to economists and policy makers.
In this summary, you will learn
- What economic theories say about a country’s financial development and income distribution,
- How five aspects of financial development influence poverty and inequality, and
- What policy makers should do in light of these connections.
About the Authors
Sami Ben Naceur is an economist at the International Monetary Fund, where RuiXin Zhang was an intern.