Financial Systems Growth And Volatility
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Author | : Roumeen Islam |
Publisher | : |
Total Pages | : 37 |
Release | : 2016 |
Genre | : Economic development |
ISBN | : |
Download Financial Systems, Growth, and Volatility Book in PDF, Epub and Kindle
This paper builds on recent research examining the impact of finance on growth, looking at the effect of the financial system on volatility in gross domestic product per capita and consumption per capita growth. It also examines the impact of credit on the composition of growth. The findings show that financial development smooths growth in gross domestic product and consumption per capita, but only up to a point. At high levels of credit, further credit is positively associated with volatility even after controlling for the quality of institutions and periods of financial crises. In large financial systems, finance may not help individuals smooth consumption volatility. The threshold at which finance's effect may be volatility enhancing may be lower than previously thought. In terms of the impact on growth, total credit (and credit to firms) has a nonlinear relationship, with rising credit supporting higher growth up to a point, beyond which the additional impact of finance on growth is negative. This can be explained by finance flowing into less productive activities (or drawing other resources into less productive activities). In addition, household credit is negatively related to manufacturing sector growth, although credit to firms has a positive relationship to manufacturing growth. This may be explained by the fact that much of household credit is used to finance the consumption (including imports) of goods and services broadly (not just manufacturing sector goods) or investment in housing.
Author | : Thorsten Beck |
Publisher | : World Bank Publications |
Total Pages | : 43 |
Release | : 2006 |
Genre | : Capital market |
ISBN | : |
Download Creating an Efficient Financial System Book in PDF, Epub and Kindle
Financial sector development fosters economic growth and reduces poverty by widening and broadening access to finance and allocating society's savings more efficiently. The author first discusses three pillars on which sound and efficient financial systems are built: macroeconomic stability and effective and reliable contractual and informational frameworks. He then describes three different approaches to government involvement in the financial sector: the laissez-faire view, the market-failure view and the market-enabling view. Finally, the author analyzes the sequencing of financial sector reforms and discusses the benefits and challenges that emerging markets face when opening their financial systems to international capital markets.
Author | : Cevdet Denizer |
Publisher | : World Bank Publications |
Total Pages | : 34 |
Release | : 2000 |
Genre | : Banks and banking |
ISBN | : |
Download Finance and Marcoeconomic Volatility Book in PDF, Epub and Kindle
Countries with more developed financial sectors, experience fewer fluctuations in real per capita output, consumption, and investment growth. But the manner in which the financial sector develops matters. The relative importance of banks in the financial system is important in explaining consumption, and investment volatility. The proportion of credit provided to the private sector, best explains volatility of consumption, and output. The authors generate their main results using fixed-effects estimates with panel data from seventy countries for the years 1956-98. Their general findings suggest that the risk management, and information processing provided by banks, maybe especially important in reducing consumption, and investment volatility. The simple availability of credit to the private sector, probably helps smooth consumption, and GDP.
Author | : Mr.Kangni R Kpodar |
Publisher | : International Monetary Fund |
Total Pages | : 35 |
Release | : 2019-03-25 |
Genre | : Business & Economics |
ISBN | : 1498304907 |
Download Financial Deepening, Terms of Trade Shocks, and Growth Volatility in Low-Income Countries Book in PDF, Epub and Kindle
This paper contributes to the literature by looking at the possible relevance of the structure of the financial system—whether financial intermediation is performed through banks or markets—for macroeconomic volatility, against the backdrop of increased policy attention on strengthening growth resilience. With low-income countries (LICs) being the most vulnerable to large and frequent terms of trade shocks, the paper focuses on a sample of 38 LICs over the period 1978-2012 and finds that banking sector development acts as a shock-absorber in poor countries, dampening the transmission of terms of trade shocks to growth volatility. Expanding the sample to 121 developing countries confirms this result, although this role of shock-absorber fades away as economies grow richer. Stock market development, by contrast, appears neither to be a shock-absorber nor a shock-amplifier for most economies. These findings are consistent across a range of econometric estimators, including fixed effect, system GMM and local projection estimates.
Author | : Ms.Era Dabla-Norris |
Publisher | : International Monetary Fund |
Total Pages | : 36 |
Release | : 2013-01-30 |
Genre | : Business & Economics |
ISBN | : 1475550820 |
Download Revisiting the Link Between Finance and Macroeconomic Volatility Book in PDF, Epub and Kindle
This paper examines the impact of financial depth on macroeconomic volatility using a dynamic panel analysis for 110 advanced and developing countries. We find that financial depth plays a significant role in dampening the volatility of output, consumption, and investment growth, but only up to a certain point. At very high levels, such as those observed in many advanced economies, financial depth amplifies consumption and investment volatility. We also find strong evidence that deeper financial systems serve as shock absorbers, mitigating the negative effects of real external shocks on macroeconomic volatility. This smoothing effect is particularly pronounced for consumption volatility in environments of high exposure - when trade and financial openness are high - suggesting significant gains from further financial deepening in developing countries.
Author | : Joshua Aizenman |
Publisher | : Cambridge University Press |
Total Pages | : 615 |
Release | : 2005-10-03 |
Genre | : Business & Economics |
ISBN | : 1139446940 |
Download Managing Economic Volatility and Crises Book in PDF, Epub and Kindle
Economic volatility has come into its own after being treated for decades as a secondary phenomenon in the business cycle literature. This evolution has been driven by the recognition that non-linearities, long buried by the economist's penchant for linearity, magnify the negative effects of volatility on long-run growth and inequality, especially in poor countries. This collection organizes empirical and policy results for economists and development policy practitioners into four parts: basic features, including the impact of volatility on growth and poverty; commodity price volatility; the financial sector's dual role as an absorber and amplifier of shocks; and the management and prevention of macroeconomic crises. The latter section includes a cross-country study, case studies on Argentina and Russia, and lessons from the debt default episodes of the 1980s and 1990s.
Author | : J. Fanelli |
Publisher | : Springer |
Total Pages | : 425 |
Release | : 2008-01-17 |
Genre | : Business & Economics |
ISBN | : 0230590187 |
Download Macroeconomic Volatility, Institutions and Financial Architectures Book in PDF, Epub and Kindle
The deregulation of domestic financial markets and the capital account in developing countries has frequently been associated with financial turmoil and macro volatility. The book analyzes the experiences of several countries, drawing implications for building development-friendly domestic and international financial architectures.
Author | : Gisele Ferreira Tiryaki |
Publisher | : |
Total Pages | : 0 |
Release | : 2003 |
Genre | : |
ISBN | : |
Download The Impact of Financial System Development on Business Cycles Volatility Book in PDF, Epub and Kindle
This paper reveals cross-country evidence on how the development of the financial system affects business cycle's volatility. The link between credit markets and economic activity has been the focus of extensive literature, but no cross-country empirical study relating the volatility of economic fluctuations with the development of the financial system has yet been performed. More developed financial systems should imply a reduced impact of asymmetric information problems, as financial institutions become more capable of identifying projects with higher probability of failure. Using a generalized method of moments technique on cross-section set, this paper shows that countries with more developed financial systems have smoother economic fluctuations.
Author | : S. Gerlach |
Publisher | : Springer |
Total Pages | : 197 |
Release | : 2006-06-28 |
Genre | : Business & Economics |
ISBN | : 1137001534 |
Download Procyclicality of Financial Systems in Asia Book in PDF, Epub and Kindle
Procyclicality of the financial system is a feature of any normally functioning economy. However, procyclicality can sometimes become 'excessive' leading to undesired effects on the real economy. The challenge that this volume addresses is to define 'excessive' and to identify policy actions that could produce superior outcomes.
Author | : Aslı Demirgüç-Kunt |
Publisher | : MIT Press |
Total Pages | : 452 |
Release | : 2001 |
Genre | : Business & Economics |
ISBN | : 9780262541794 |
Download Financial Structure and Economic Growth Book in PDF, Epub and Kindle
CD-ROM contains: World Bank data.