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Stock market development and income inequality

Athanasios Tsagkanos (Department of Business Administration, University of Patras, Patras, Greece)

Journal of Economic Studies

ISSN: 0144-3585

Article publication date: 9 January 2017

1189

Abstract

Purpose

The purpose of this paper, in contrast to other studies, is to examine an indirect relationship in terms of the effect of income inequality with stock market development in countries South of the Euro-zone during the period 2002-2013.

Design/methodology/approach

The author adopts a new econometric method, the Improved Augmented Regression Method, to obtain bias-reduced and stationary-corrected estimators.

Findings

The results reveal a negative relationship that puts into doubt the recovery of growth.

Originality/value

The new econometric methodology leads to a novel suggested policy on the need for reforms adopting a low-income tax rate system and reinforcement of export-oriented productivity. This conclusion is strengthened by the respective relationship in USA.

Keywords

Acknowledgements

The author thanks an anonymous reviewer for his (or her) extremely helpful comments and suggestions that improved the author’s work significantly.

Citation

Tsagkanos, A. (2017), "Stock market development and income inequality", Journal of Economic Studies, Vol. 44 No. 1, pp. 87-98. https://doi.org/10.1108/JES-08-2015-0155

Publisher

:

Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited

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