An Empirical Study On Financial Development Affect The Income Gap In The Brics

After the 2007 financial crisis,the United States,Europe,Japan and other major developed economies recovers slowly,and the Brics,the representative of the rapid development of emerging economies,has played a important role for promoting the full recovery of the global economy.In the key period of world economic growth conversion from the old to the new,the Brics' economic and financial thrust may be irreversible,but there also exist many problems,such as the uneven distribution of wealth and income gap problem.It is particularly important to understand the specific mechanism of the Brics' financial development how to affect the income gap.On the one hand,the research can enrich the theory of financial development affect the applicability of the theory of financial development and income gap in the Brics,on the other hand,the research will provide a new perspective for the Brics' relevant policy formulation and implementation of financial development and income distribution.According to the existing research and practical research,based on SWIID database,this paper selectes the data of the Brics' financial development and income gap from 2000 to 2011,respectively,and uses the panel quantile regression model and fixed effect panel regression model system separately to analysis the mechanism of the Brics' financial development how to affect the income gap.Thus,the model can make full use of the panel regression model about the advantage of the control the Brics heterogeneity,and about the advantage of bringing greater clarity to the dependent variable--the overall distribution of income gap.The empirical results show that the improvement of financial efficiency and financial liberalization,and financial scale enlargement under different quantile level significantly expand the income gap in the Brics,and the optimization of financial structure helps to reduce the income gap.Other control variables have different impact on the income gap,the population growth rate significantly expands the income gap,urbanization rate and government spending at times have a positive effect on the income,and urbanization rate and government spending have a negative effect on the income sometimes,real economic growth has an "inverse U" relationship with income gap.However,fixed effect panel regression model and quantile regression have different conclusion.Therefore,results show that the accuracy of conclusion about the traditional fixed effects model remains to be further inspection.According to the empirical conclusions,the paper makes some suggestions that based on national conditions,the Brics should promote financial reform step by step,and vigorously develop pratt & finance,and expand government transfer payment,and must perfect and supervise the mechanism of restraining from.And China should make greater efforts to increase financial investment in rural areas,balance regional development,and strengthen international exchanges and cooperation between the areas.