UM
The role of financial systems for cross-country differences in the link between income and consumption inequality
Gu, Xinhua; Zhang, Yang; Chang, Xiao
2017
Source PublicationAPPLIED ECONOMICS
ISSN0003-6846
Volume49Issue:24Pages:2365-2378
AbstractThis article discusses why consumption inequality stays low despite high income inequality in the U.S; but income inequality is closely followed by consumption inequality in China. We show that different financial systems can play a critical role in shaping the cross-country different links between income and consumption inequality. This phenomenon is consistent with the cross-country different relationships between income inequality and saving rates. Consumer credit expansion in the U.S. makes inequality much less serious for consumption than for income, and this result holds to an even larger extent if more domestic credit can be financed by foreign savings. But this is not the case in China, whose financial system focuses only on investment and trade while neglecting liquidity constraints on consumption. Our assertions accord well with evidence found from the U.S., China, and other related economies.
KeywordSaving rates income and consumption inequality consumer credit capital inflows global imbalances
DOI10.1080/00036846.2016.1240338
URLView the original
Indexed BySSCI
Language英语
WOS Research AreaBusiness & Economics
WOS SubjectEconomics
WOS IDWOS:000396816400006
PublisherROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD
The Source to ArticleWOS
Fulltext Access
Citation statistics
Document TypeJournal article
CollectionUniversity of Macau
Recommended Citation
GB/T 7714
Gu, Xinhua,Zhang, Yang,Chang, Xiao. The role of financial systems for cross-country differences in the link between income and consumption inequality[J]. APPLIED ECONOMICS,2017,49(24):2365-2378.
APA Gu, Xinhua,Zhang, Yang,&Chang, Xiao.(2017).The role of financial systems for cross-country differences in the link between income and consumption inequality.APPLIED ECONOMICS,49(24),2365-2378.
MLA Gu, Xinhua,et al."The role of financial systems for cross-country differences in the link between income and consumption inequality".APPLIED ECONOMICS 49.24(2017):2365-2378.
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