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Financial Development and Economic Fluctuations

Year: 2003

Type: article

Abstract: This paper provides empirical evidence on the link between financial system development and business cycles volatility. Previous studies have shown that economic fluctuations become less pronounced as the financial system of a country develops. This paper reveals that this result is not apparent when dealing with shorter horizons and when considering the behavior of other components of output, such as private investment and consumption. Using a dynamic Generalized Method of Moments technique on a cross-country panel data set, this paper shows that financial development may actually contribute to increased consumption volatility.

Source: OpenMETU (Middle East Technical University)

Author: Gisele Ferreira-Tiryaki

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

OpenAlex ID: W1575535659

FWCI:

Cites: 30

Cited by: 11

Related to: 10