Summary of Financial Development, Inequality and Poverty: Some International Evidence

Looking for the report?
We have the summary! Get the key insights in just 5 minutes.

Financial Development, Inequality and Poverty: Some International Evidence summary
Start getting smarter:
or see our plans




  • Innovative


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.

About the Authors

Sami Ben Naceur is an economist at the International Monetary Fund, where RuiXin Zhang was an intern.



A large body of research reveals a link between countries’ financial development and their economic growth, but much less study has gone into examining a nation’s financial advances in relation to its income distribution. Theories on the influence of the former on the latter are split between those that predict a linear relationship and those that foresee an “inverted-U” connection. The linear notion suggests that as financial progress increases, income inequality declines. The inverted-U concept predicts that low levels of financial development disproportionately benefit...

More on this topic

By the same authors

Can Islamic Banking Increase Financial Inclusion?

Customers who read this summary also read

Global Inequality
Globalization and Income Inequality Revisited
Capitalism, Alone
Why Wall Street Matters
Between Debt and the Devil
Policies to Ensure Asia’s Sustained Economic Success

Related Channels

Comment on this summary