Finance and Macroeconomic Volatility

By Cevdet A. Denizer, Murat F. Iyigun, Ann L. Owen. 2000

239 citations recorded by the source corpus.

Abstract Countries with more developed financial sectors experience smaller fluctuations in real per capita output, consumption, and investment growth. However, the manner in which the financial sector develops matters. The relative importance of banks in the financial system is important in explaining GDP, consumption, and investment volatility, and the proportion of credit provided to the private sector explains the volatility of consumption and output. The main results are generated using fixed-effects estimation with panel data from 70 countries covering the years 1956 through 1998.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/3438c43f648ed8d6c55148ec16e66ae817558cf8

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Citations in the corpus

Liquidity Needs and Vulnerability to Financial Underdevelopment (2003, background): “, Denizer et al., 2002; Easterly et al., 2000). In the sample of countries and years considered in this paper, a one percentage point increase in the standard deviation of the growth of real manufacturing value added increases the standard deviation of the growth of real GDP per capita by about 0.4 ”
Financial Openness and Business Cycle Volatility (2002, background): “(2000), Denizer et al. (2000), and Da Silva (2001) find a more sophisticated financial system to be associated with lower volatility.”
Is Natural Resource Abundance a Stimulus for Financial Development in the USA (2017, methodology): “Existing cointegration approaches include Engle and Granger (1987) (EG), Johansen (1991) (JOH), Phillips and Ouliaris (1990), Peter Boswijk (1994) (BO) and Banerjee et al.”
Revisiting the Link between Finance and Macroeconomic Volatility (2013, unknown): “Using a similar methodology, but different controls and aggregation periods, Denizer et al. (2002) generally support a negative correlation between financial depth and growth, consumption, and investment volatility.”
Financial Integration and Macroeconomic Volatility (2003, result): “Consistent with the results of authors such as Denizer, Iyigun, and Owen (2002), we find that financial sector development, as proxied by this measure , is in fact associated with lower output volatility.”
Banking stability, competition, and economic volatility (2016, background): “A more developed banking system promotes a country’s economic growth during normal periods (Rajan and Zingales, 1998; Levine, 2005; Ongena and Giannetti, 2009) and reduces economic volatility (Denizer et al., 2002; Easterly et al., 2000; Larrain, 2006; Raddatz, 2006).”
Financial Globalization and Economic Policies (2009, unknown): “…are indeed precursors of crises, the deep determinants of bad macroeconomic and structural policies can in fact be traced back to weak institutions (Acemoglu 33 See Easterly, Islam, and Stiglitz (2001), Beck, Lundberg and Majnoni (2001), Denizer, Iyigun, and Owen (2002), and Larrain (2004).”