Affiliation:
1. Li Anmin Institute of Economic Research Liaoning University Shenyang China
2. School of International Economics and International Relations Liaoning University Shenyang China
3. International School of Economics and Management Capital University of Economics and Business Beijing China
Abstract
AbstractThis paper investigates the impact of macroprudential policies, capital controls, and their joint effect on income inequality. Using a panel dataset covering 60 countries from 2000 to 2019, we find that macroprudential policies and capital controls can mitigate income inequality, which are robust to various subsets of policy indexes. However, the effectiveness of macroprudential policies on income inequality depends on the tightness of capital controls. We verify that macroprudential policies affect income inequality through private sector leverage, and both capital controls and macroprudential policies have significant influences on gross capital flows and net capital flows to affect income inequality.
Funder
National Office for Philosophy and Social Sciences
Beijing Municipal Education Commission
National Natural Science Foundation of China