The Interaction Between Financial Development and Income Inequality: Turkish Case

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Çukurova Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi
Cilt: 29 Sayı: 2
The Interaction Between Financial Development and Income Inequality: Turkish Case

The Interaction Between Financial Development and Income Inequality: Turkish Case

Pages : 89-97

View : 27 | Download : 39

Publication Date : 2025-12-29

Article Type : Research Paper

Abstract :Income inequality remains a significant problem, particularly in developing countries. Ensuring fair income distribution among individuals is directly related to their well-being. Therefore, it is crucial that individuals have access to the financial system regardless of their income level, and that financial system resources are adequately developed. In this context, this study emphasizes on analysing the effect of financial development on ensuring fair income distribution. Therefore, it examines Financial Kuznets Hypothesis by analysing the interaction between income inequality and financial development. In this context, the ARDL bounds test method was applied to data from Turkey between 1990 and 2020. The analysis supports the inverted-U curve which express that income inequality will increase in the initial phase as financial development increases, after it decreases. This highlights the importance of analysing policies for financial system development together to ensure equitable income distribution in a country.
Keywords : Gelir eşitsizliği, Finansal Kuznets Hipotezi, ARDL

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