The finance-inequality nexus in the era of financialisation: Evidence for Portugal
Autor(a) principal: | |
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Data de Publicação: | 2023 |
Outros Autores: | |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10071/30016 |
Resumo: | Since the 1980s, Portuguese policy makers have engaged in a strong process of liberalization, deregulation and privatization of the financial system to adhere to the rules imposed by the European Economic Community and to promote financial growth, boost economic growth and reduce inequality. However, the Portuguese economic growth has exhibited a weaker performance and inequality has continued to widen in the last decades, a situation that seems to contradict the mainstream beliefs regarding the supportive role played by financial growth in the era of financialisation. This article undertakes an empirical assessment of the finance–inequality nexus by performing a time series econometric analysis for Portugal from 1980 to 2020 through the estimation of both linear and non-linear models. It finds strong evidence for a positive (linear) relationship between finance and inequality and some evidence for a convex quadratic (non-linear) relationship between finance and inequality in Portugal, corroborating the hypothesis that the financial growth has been prejudicial, enhancing inequality in Portugal. These findings highlight the urgent need to abandon the so-called ‘trickle-down theory’ or the ‘horse and sparrow theory’ and to implement the so-called ‘trickle-up theory’ with the support of pro-poor public policies to decrease inequality in Portugal. |
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The finance-inequality nexus in the era of financialisation: Evidence for PortugalFinancial growthFinancialisationGeneralized method of moments estimatorInequalityPortugalTime seriesSince the 1980s, Portuguese policy makers have engaged in a strong process of liberalization, deregulation and privatization of the financial system to adhere to the rules imposed by the European Economic Community and to promote financial growth, boost economic growth and reduce inequality. However, the Portuguese economic growth has exhibited a weaker performance and inequality has continued to widen in the last decades, a situation that seems to contradict the mainstream beliefs regarding the supportive role played by financial growth in the era of financialisation. This article undertakes an empirical assessment of the finance–inequality nexus by performing a time series econometric analysis for Portugal from 1980 to 2020 through the estimation of both linear and non-linear models. It finds strong evidence for a positive (linear) relationship between finance and inequality and some evidence for a convex quadratic (non-linear) relationship between finance and inequality in Portugal, corroborating the hypothesis that the financial growth has been prejudicial, enhancing inequality in Portugal. These findings highlight the urgent need to abandon the so-called ‘trickle-down theory’ or the ‘horse and sparrow theory’ and to implement the so-called ‘trickle-up theory’ with the support of pro-poor public policies to decrease inequality in Portugal.Wiley2025-06-12T00:00:00Z2023-01-01T00:00:00Z20232023-12-18T10:20:01Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10071/30016eng1076-930710.1002/ijfe.2848Barradas, R.Lakhani, R.info:eu-repo/semantics/embargoedAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-12-24T01:20:59Zoai:repositorio.iscte-iul.pt:10071/30016Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-20T00:55:48.995897Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
The finance-inequality nexus in the era of financialisation: Evidence for Portugal |
title |
The finance-inequality nexus in the era of financialisation: Evidence for Portugal |
spellingShingle |
The finance-inequality nexus in the era of financialisation: Evidence for Portugal Barradas, R. Financial growth Financialisation Generalized method of moments estimator Inequality Portugal Time series |
title_short |
The finance-inequality nexus in the era of financialisation: Evidence for Portugal |
title_full |
The finance-inequality nexus in the era of financialisation: Evidence for Portugal |
title_fullStr |
The finance-inequality nexus in the era of financialisation: Evidence for Portugal |
title_full_unstemmed |
The finance-inequality nexus in the era of financialisation: Evidence for Portugal |
title_sort |
The finance-inequality nexus in the era of financialisation: Evidence for Portugal |
author |
Barradas, R. |
author_facet |
Barradas, R. Lakhani, R. |
author_role |
author |
author2 |
Lakhani, R. |
author2_role |
author |
dc.contributor.author.fl_str_mv |
Barradas, R. Lakhani, R. |
dc.subject.por.fl_str_mv |
Financial growth Financialisation Generalized method of moments estimator Inequality Portugal Time series |
topic |
Financial growth Financialisation Generalized method of moments estimator Inequality Portugal Time series |
description |
Since the 1980s, Portuguese policy makers have engaged in a strong process of liberalization, deregulation and privatization of the financial system to adhere to the rules imposed by the European Economic Community and to promote financial growth, boost economic growth and reduce inequality. However, the Portuguese economic growth has exhibited a weaker performance and inequality has continued to widen in the last decades, a situation that seems to contradict the mainstream beliefs regarding the supportive role played by financial growth in the era of financialisation. This article undertakes an empirical assessment of the finance–inequality nexus by performing a time series econometric analysis for Portugal from 1980 to 2020 through the estimation of both linear and non-linear models. It finds strong evidence for a positive (linear) relationship between finance and inequality and some evidence for a convex quadratic (non-linear) relationship between finance and inequality in Portugal, corroborating the hypothesis that the financial growth has been prejudicial, enhancing inequality in Portugal. These findings highlight the urgent need to abandon the so-called ‘trickle-down theory’ or the ‘horse and sparrow theory’ and to implement the so-called ‘trickle-up theory’ with the support of pro-poor public policies to decrease inequality in Portugal. |
publishDate |
2023 |
dc.date.none.fl_str_mv |
2023-01-01T00:00:00Z 2023 2023-12-18T10:20:01Z 2025-06-12T00:00:00Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10071/30016 |
url |
http://hdl.handle.net/10071/30016 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
1076-9307 10.1002/ijfe.2848 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/embargoedAccess |
eu_rights_str_mv |
embargoedAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
Wiley |
publisher.none.fl_str_mv |
Wiley |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
instname_str |
Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
instacron_str |
RCAAP |
institution |
RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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1799136444142321664 |