Is there any financial kuznets curve in Jordan? a structural time series analysis

This paper investigates the notion of the financial Kuznets curve in an emerging country—Jordan. Both variants of the financial Kuznets curve (growth financial Kuznets curve and inequality financial Kuznets curve) have been examined using different time series methodologies applying to a sample peri...

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Main Authors: Ibrahim N. Khatatbeh, Wasfi Al Salamat, Mohammed N. Abu-Alfoul, Jamil J. Jaber
Format: Article
Language:English
Published: Taylor & Francis Group 2022-12-01
Series:Cogent Economics & Finance
Subjects:
Online Access:https://www.tandfonline.com/doi/10.1080/23322039.2022.2061103
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author Ibrahim N. Khatatbeh
Wasfi Al Salamat
Mohammed N. Abu-Alfoul
Jamil J. Jaber
author_facet Ibrahim N. Khatatbeh
Wasfi Al Salamat
Mohammed N. Abu-Alfoul
Jamil J. Jaber
author_sort Ibrahim N. Khatatbeh
collection DOAJ
description This paper investigates the notion of the financial Kuznets curve in an emerging country—Jordan. Both variants of the financial Kuznets curve (growth financial Kuznets curve and inequality financial Kuznets curve) have been examined using different time series methodologies applying to a sample period from 1993 to 2017. The unobserved components model results provide evidence for both variants of the financial Kuznets curve when using private credit to GDP as a proxy for financial-sector development. Moreover, non-nested model tests suggest that financial intermediaries are relatively more important than stock markets for income inequality. Overall, this paper provides evidence for the financial Kuznets curve in emerging countries. Moreover, it provides new insights for policymakers in Jordan in their challenge to boost economic growth and decelerate income inequality, by reversing the trend towards the concentration of power in the financial sector and creating public-financial institutions that provide affordable credit to small businesses and households.
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spelling doaj-art-7e59bf75a0294bddaddd70ac3029d4602025-08-20T02:16:44ZengTaylor & Francis GroupCogent Economics & Finance2332-20392022-12-0110110.1080/23322039.2022.2061103Is there any financial kuznets curve in Jordan? a structural time series analysisIbrahim N. Khatatbeh0Wasfi Al Salamat1Mohammed N. Abu-Alfoul2Jamil J. Jaber3Department of Banking and Financial Sciences, Faculty of Economics and Administrative Sciences, The Hashemite University, JordanDepartment of Banking and Financial Sciences, Faculty of Economics and Administrative Sciences, The Hashemite University, JordanSchool of Business, Law, and Entrepreneurship, Swinburne University of Technology, Melbourne, AustraliaDepartment of Finance, The University of Jordan, Aqaba Branch, JordanThis paper investigates the notion of the financial Kuznets curve in an emerging country—Jordan. Both variants of the financial Kuznets curve (growth financial Kuznets curve and inequality financial Kuznets curve) have been examined using different time series methodologies applying to a sample period from 1993 to 2017. The unobserved components model results provide evidence for both variants of the financial Kuznets curve when using private credit to GDP as a proxy for financial-sector development. Moreover, non-nested model tests suggest that financial intermediaries are relatively more important than stock markets for income inequality. Overall, this paper provides evidence for the financial Kuznets curve in emerging countries. Moreover, it provides new insights for policymakers in Jordan in their challenge to boost economic growth and decelerate income inequality, by reversing the trend towards the concentration of power in the financial sector and creating public-financial institutions that provide affordable credit to small businesses and households.https://www.tandfonline.com/doi/10.1080/23322039.2022.2061103Financial kuznets curvefinancial developmenteconomic growthincome inequalityunobserved components modelnon-nested model tests
spellingShingle Ibrahim N. Khatatbeh
Wasfi Al Salamat
Mohammed N. Abu-Alfoul
Jamil J. Jaber
Is there any financial kuznets curve in Jordan? a structural time series analysis
Cogent Economics & Finance
Financial kuznets curve
financial development
economic growth
income inequality
unobserved components model
non-nested model tests
title Is there any financial kuznets curve in Jordan? a structural time series analysis
title_full Is there any financial kuznets curve in Jordan? a structural time series analysis
title_fullStr Is there any financial kuznets curve in Jordan? a structural time series analysis
title_full_unstemmed Is there any financial kuznets curve in Jordan? a structural time series analysis
title_short Is there any financial kuznets curve in Jordan? a structural time series analysis
title_sort is there any financial kuznets curve in jordan a structural time series analysis
topic Financial kuznets curve
financial development
economic growth
income inequality
unobserved components model
non-nested model tests
url https://www.tandfonline.com/doi/10.1080/23322039.2022.2061103
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