Payame Noor University Economic Growth and Development Research 2228-5954 2 6 2012 03 20 The Effect of Financial Development on Income Inequality in Iran The Effect of Financial Development on Income Inequality in Iran 208 173 96 FA Nasim Jaberi Khosroshahi MA in Economics, Oskoo Azad University Mohammad Reza Mohamadvand Nahidi Associate Professor of Economics, Tabriz Azad University Davood Noroozi MA in Industrial Management, Bonab Azad University Journal Article 2011 10 24 Income distribution is one of the policymakers concerns. So it is important to investigate its determinants. Considering that financial development is one of the effective factors on income distribution, we decide to investigate its effect on income distribution during 1973-2008 using Autoregressive Distributed Lags (ARDL). Results show that the relationship between financial development and Gini coefficient is positive and reducing so support the Green-Jovanovic (1990) hypothesis. The relationship between GDP per capita and Gini coefficient is positive and reducing too. Also human capital has negative and significant impact and inflation has positive and significant impact on Gini coefficient. CUSUM and CUSUMSQ structural stability tests show that the estimated coefficients are stable over the studying period. Income distribution is one of the policymakers concerns. So it is important to investigate its determinants. Considering that financial development is one of the effective factors on income distribution, we decide to investigate its effect on income distribution during 1973-2008 using Autoregressive Distributed Lags (ARDL). Results show that the relationship between financial development and Gini coefficient is positive and reducing so support the Green-Jovanovic (1990) hypothesis. The relationship between GDP per capita and Gini coefficient is positive and reducing too. Also human capital has negative and significant impact and inflation has positive and significant impact on Gini coefficient. CUSUM and CUSUMSQ structural stability tests show that the estimated coefficients are stable over the studying period. https://egdr.journals.pnu.ac.ir/article_96_c2a199f16ed93a19da7a60a1d974c03b.pdf