This paper studies the relationship between the development of stock markets and income inequality. It shows that introducing equity financing in an economy with safe and risky sectors, where debt is initially the only financial instrument and where market imperfections generate credit rationing...

In a world where poor countries provide weak protection for intellectual property rights, market integration will systematically shift technical change in favor of rich nations. For this reason, free trade can increase international income differences. At the same time, integration with...