Financial development and economic fluctuations

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2003-6-1

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Tiryaki, Gisele Ferreira

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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.

Subject Keywords

Financial development, Economic fluctuations, Generalized Method of Moments technique

URI

http://www2.feas.metu.edu.tr/metusd/ojs/index.php/metusd/article/view/25
https://hdl.handle.net/11511/58528

Journal

ODTÜ Gelişme Dergisi

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Department of Economics, Article

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Citation Formats

G. F. Tiryaki, “Financial development and economic fluctuations,” ODTÜ Gelişme Dergisi, vol. 30, no. 1, pp. 89–106, 2003, Accessed: 00, 2020. [Online]. Available: http://www2.feas.metu.edu.tr/metusd/ojs/index.php/metusd/article/view/25.