Distributional Effects of Crises: The Financial Channel
- 1 June 2004
- preprint
- Published by Elsevier BV in SSRN Electronic Journal
Abstract
Financial crises affect income distribution via different channels. This paper argues that there is an important channel overlooked by the literature, namely the financial channel. We study how this channel operates by analyzing data from several Latin American countries, including Argentina, Bolivia, Chile, Ecuador, Mexico, Peru, and Uruguay. First, we investigate financial transfers from non-participants to participants of the financial sector. Second, we explore who receives these transfers and what other reallocations occur within the financial sector. Our analysis shows that financial redistributions during crises are large, benefiting the rich and hurting the poor.This publication has 21 references indexed in Scilit:
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