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Durham e-Theses
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Does Economic Inequality Cause Financial Crises?

MANNING, BRETT (2014) Does Economic Inequality Cause Financial Crises? Doctoral thesis, Durham University.

PDF (Full text of thesis) - Accepted Version
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Inequality rose rapidly in the run up to the 1929 stock market crash and the 2007 financial crisis. Both crises precipitated long and deep recessions. This paper seeks to determine if there is any deeper relationship between inequality and financial stability. The work presents an empirical investigation of the topic and theoretical model of how such a relationship could exist. My original contribution to the literature is threefold: (1) the empirical detection of a small interaction between economic inequality and propensity tofinancial crises, (2) the presentation of a novel measure of financial stability using
principal component analysis and its interaction with economic inequality, and (3) the presentation of a novel theoretical model that demonstrates a possible mechanism by which inequality may reduce financial stability.

Item Type:Thesis (Doctoral)
Award:Doctor of Philosophy
Keywords:Economic Inequality, Financial Crises, PCA, Two Period Model
Faculty and Department:Faculty of Social Sciences and Health > Economics, Finance and Business, School of
Thesis Date:2014
Copyright:Copyright of this thesis is held by the author
Deposited On:02 Jun 2014 12:33

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