Entrepreneurship, Financial Intermediation, and Inequality

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Abstract

This paper provides a simple dynamic framework for examining the long-run relationship between financial intermediation and wealth inequality. By considering two types of entrepreneurial financing (self-financing and intermediated financing), this paper shows that wealth inequality is more severe in an economy in which all financing is intermediated than in an economy where some entrepreneurs rely on self-financing. This result is consistent with the augmented Kuznets hypothesis that large-scale production operations and financial intermediary development are associated with higher inequality.

Journal

  • 経済科学

    経済科学 64 (2), 1-22, 2016-09-30

    名古屋大学大学院経済学研究科

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