Financial Development, Financial Fragility, and Growth
| Autor: | Norman Loayza, Romain Ranciere |
|---|---|
| Přispěvatelé: | The World Bank, International Monetary Fund (IMF), Universitat Pompeu Fabra [Barcelona] (UPF), Bauer, Caroline, Universitat Pompeu Fabra. Departament d'Economia i Empresa |
| Rok vydání: | 2005 |
| Předmět: |
Fiscal&Monetary Policy
Financial Intermediation Payment Systems&Infrastructure Financial Crisis Management&Restructuring Environmental Economics&Policies Econometrics Achieving Shared Growth Financial Economics Financial Crisis Management&Restructuring Macroeconomic Management Economics and Econometrics financial development media_common.quotation_subject Financial intermediary Banking crisis Financial fragility Theoretical models Monetary economics jel:G21 Fragility Financial developement Accounting Economic Growth 0502 economics and business Economics ddc:330 Contradiction Macroeconomics and International Economics 050207 economics [SHS.ECO] Humanities and Social Sciences/Economics and Finance 050205 econometrics media_common 050208 finance JEL: E - Macroeconomics and Monetary Economics/E.E4 - Money and Interest Rates/E.E4.E44 - Financial Markets and the Macroeconomy Financial crisis Growth empirics pooled mean group estimation financial volatility financial intermediation financial liberalization banking crises financial fragility Macroeconomic Analyses of Economic Development 05 social sciences 1. No poverty JEL: O - Economic Development Innovation Technological Change and Growth/O.O1 - Economic Development/O.O1.O16 - Financial Markets • Saving and Capital Investment • Corporate Finance and Governance Financial development jel:C33 [SHS.ECO]Humanities and Social Sciences/Economics and Finance Currency crisis Volatility 8. Economic growth Financial volatility JEL: O - Economic Development Innovation Technological Change and Growth/O.O4 - Economic Growth and Aggregate Productivity/O.O4.O40 - General Finance |
| Zdroj: | Journal of Money Credit and Banking Journal of Money Credit and Banking, 2006, 38 (4), pp.1051-1076 Recercat. Dipósit de la Recerca de Catalunya instname Repositorio Digital de la UPF Universitat Pompeu Fabra |
| Popis: | This paper attempts to reconcile the apparent contradiction between two strands of the literature on the effects of financial intermediation on economic activity. On the one hand, the empirical growth literature finds a positive effect of financial depth as measured by, for instance, private domestic credit and liquid liabilities (e.g., Levine, Loayza, and Beck 2000). On the other hand, the banking and currency crisis literature finds that monetary aggregates, such as domestic credit, are among the best predictors of crises and their related economic downturns (e.g., Kaminski and Reinhart 1999). This paper starts by illustrating these opposing effects by, first, analyzing the dynamics of output growth and financial intermediation around systemic banking crises and, second, showing that the growth enhancing effects of financial depth are weaker in countries that experienced such crises. After these illustrative exercises, the paper attempts an empirical explanation of the apparently opposing effects of financial intermediation. This explanation is based on a distinction between transitory and trend effects of domestic credit aggregates on economic growth. Working with a panel of cross-country and time-series observations, the paper estimates an encompassing model of long- and short-run effects, following Pesaran, Shin, and Smith (1999)’s Pooled Mean Group Estimator. The main result of the paper is that a positive long-run relationship between financial intermediation and output growth co-exists with a, mostly, negative short-run relationship. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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