The Effects of Financial Development on Income Inequality

Abstract

Income inequality in economy is shown by the income differences between individuals. It is different from the poverty term. Poverty is individuals? obtaining their requirements needed to sustain their life in a limited way. Income inequality affects many economic factors. It may cause an adverse impact on the growth of the country. On the other hand finance is seen as an important element of the growth in the countries is experiencing financial liberalization. Therefore, this study is investigating the relationship between income inequality and financial development. Consequently a long term relationship between income inequality and financial development level has been determined. Also a mutual causal relationship between these two concepts has been found.