FINANCIAL KUZNETS CURVE, GLOBALISATION AND INCOME DISTRIBUTION: THE ELEMENTS OF TRIPARTITE RELATIONSHIP
- Labor Share of Income, Financial Kuznets Hypothesis, Financial Sector Development, Economic Globalization
- Emek Gelir Payı, Finansal Kuznets Hipotezi, Finansal Sektör Gelişmesi, Ekonomik Küreselleşme
How to Cite
This paper reexamines the empirical validity of financial Kuznets hypothesis in terms of looking for functional income distribution and economic globalisation for OECD countries over the 1980-2017 period. In doing so, the current study applies the panel fixed-effects and the system-GMM approaches to show that the estimates are complemented with the traditional assumptions on the financial Kuznets hypothesis. From a functional income distribution perspective, the empirical findings highlight the importance of financial sector development in reducing the income distribution between labor and capital. Also, the paper then provides new evidence on economic globalisation dynamics in exacerbating a more uneven distribution of income. Finally, the empirical findings imply that if any economic unit opens its borders without developing its financial sector, the labor’s share accruing in national income would be narrowed on behalf of capital over time.
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