Finance and Macroeconomic Volatility

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 fin...

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Main Authors:	Denizer, Cevdet, Iyigun, Murat F., Owen, Ann L.
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ACCOUNTING AGGREGATE OUTPUT AGGREGATE SUPPLY AGGREGATE SUPPLY CURVE ANNUAL GROWTH ANNUAL OBSERVATIONS ASYMMETRIC INFORMATION AVERAGE GROWTH AVERAGE GROWTH RATE AVERAGE LEVEL BANKING INDUSTRY BANKS BUSINESS CYCLE BUSINESS CYCLES CAPITAL FLOWS CAPITAL MARKET CAPITAL MARKETS CENTRAL BANK CONTAGION CORPORATE GOVERNANCE COUNTRY CHARACTERISTICS COUNTRY EFFECTS COUNTRY REGRESSIONS COUNTRY RESULTS COUNTRY SPECIFIC CREDIT MARKETS CROSS COUNTRY CROSS-COUNTRY COMPARISONS CROSS-COUNTRY DATA CROSS-COUNTRY REGRESSION CROSS-SECTIONAL DATA DATA AVAILABILITY DATA SET DATA SETS DEBT DEPENDENT VARIABLE DEVELOPED COUNTRIES DEVELOPMENT INDICATORS DIVERSIFICATION DOMESTIC CREDIT ECONOMIC ACTIVITY ECONOMIC DYNAMICS ECONOMIC EQUILIBRIUM ECONOMIC FLUCTUATIONS ECONOMIC GROWTH ECONOMIC LITERATURE ECONOMIC REVIEW ECONOMIC STUDIES ECONOMIC THEORY EMPIRICAL EVIDENCE EMPIRICAL LITERATURE EMPIRICAL RESULTS EMPIRICAL STUDIES EMPIRICAL WORK ENDOGENOUS GROWTH ERROR TERM ESTIMATION TECHNIQUES EXCHANGE RATE EXOGENOUS SHOCKS EXOGENOUS VARIABLE EXPLANATORY POWER EXTERNAL SHOCKS FINANCIAL DEVELOPMENT FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MANAGEMENT FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SECTORS FINANCIAL SYSTEMS FIXED EFFECTS FIXED EFFECTS ESTIMATION FOREIGN EXCHANGE GDP GROWTH LITERATURE GROWTH RATE GROWTH RATES GROWTH REGRESSIONS HIGH INCOME COUNTRIES IMPORTS INCOME INCOME GROWTH INDEPENDENT VARIABLES INDUSTRIALIZED COUNTRIES INFLATION INFLATION RATE INFORMATION ASYMMETRIES INTEREST RATE INVESTMENT OPPORTUNITIES LABOR MARKET LIQUIDITY LONG RUN M2 MACROECONOMIC FACTORS MACROECONOMIC PERFORMANCE MACROECONOMIC VARIABLES MARKET IMPERFECTIONS MONETARY ECONOMICS MONETARY POLICY MONEY SUPPLY NEGATIVE RELATIONSHIP NEGATIVE SIGN NET WORTH OPEN ECONOMIES OUTPUT GROWTH OUTPUT VOLATILITY PER CAPITA CONSUMPTION PER CAPITA CONSUMPTION GROWTH PER CAPITA INCOME PER CAPITA INCOMES POLICY CHANGES POLICY RESEARCH POLITICAL ECONOMY POSITIVE COEFFICIENT POSITIVE EFFECT POSITIVE RELATIONSHIP POVERTY REDUCTION PRIVATE SECTOR PUBLIC SECTOR RANDOM EFFECTS REAL GDP REGRESSION TECHNIQUES RELATIVE IMPORTANCE RELATIVE SUPPLY RESOURCE ALLOCATION RISK MANAGEMENT SENSITIVITY ANALYSIS SIGNIFICANCE LEVEL SIGNIFICANT RELATIONSHIP SMOOTHING CONSUMPTION STANDARD DEVIATION TRANSACTIONS COSTS
Online Access:	http://documents.worldbank.org/curated/en/2000/11/748668/finance-macroeconomic-volatility http://hdl.handle.net/10986/19762

id	okr-10986-19762
recordtype	oai_dc
spelling	okr-10986-197622021-04-23T14:03:44Z Finance and Macroeconomic Volatility Denizer, Cevdet Iyigun, Murat F. Owen, Ann L. ACCOUNTING AGGREGATE OUTPUT AGGREGATE SUPPLY AGGREGATE SUPPLY CURVE ANNUAL GROWTH ANNUAL OBSERVATIONS ASYMMETRIC INFORMATION AVERAGE GROWTH AVERAGE GROWTH RATE AVERAGE LEVEL BANKING INDUSTRY BANKS BUSINESS CYCLE BUSINESS CYCLES CAPITAL FLOWS CAPITAL MARKET CAPITAL MARKETS CENTRAL BANK CONTAGION CORPORATE GOVERNANCE COUNTRY CHARACTERISTICS COUNTRY EFFECTS COUNTRY REGRESSIONS COUNTRY RESULTS COUNTRY SPECIFIC CREDIT MARKETS CROSS COUNTRY CROSS-COUNTRY COMPARISONS CROSS-COUNTRY DATA CROSS-COUNTRY REGRESSION CROSS-SECTIONAL DATA DATA AVAILABILITY DATA SET DATA SETS DEBT DEPENDENT VARIABLE DEVELOPED COUNTRIES DEVELOPMENT INDICATORS DIVERSIFICATION DOMESTIC CREDIT ECONOMIC ACTIVITY ECONOMIC DYNAMICS ECONOMIC EQUILIBRIUM ECONOMIC FLUCTUATIONS ECONOMIC GROWTH ECONOMIC LITERATURE ECONOMIC REVIEW ECONOMIC STUDIES ECONOMIC THEORY EMPIRICAL EVIDENCE EMPIRICAL LITERATURE EMPIRICAL RESULTS EMPIRICAL STUDIES EMPIRICAL WORK ENDOGENOUS GROWTH ERROR TERM ESTIMATION TECHNIQUES EXCHANGE RATE EXOGENOUS SHOCKS EXOGENOUS VARIABLE EXPLANATORY POWER EXTERNAL SHOCKS FINANCIAL DEVELOPMENT FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MANAGEMENT FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SECTORS FINANCIAL SYSTEMS FIXED EFFECTS FIXED EFFECTS ESTIMATION FOREIGN EXCHANGE GDP GROWTH LITERATURE GROWTH RATE GROWTH RATES GROWTH REGRESSIONS HIGH INCOME COUNTRIES IMPORTS INCOME INCOME GROWTH INDEPENDENT VARIABLES INDUSTRIALIZED COUNTRIES INFLATION INFLATION RATE INFORMATION ASYMMETRIES INTEREST RATE INVESTMENT OPPORTUNITIES LABOR MARKET LIQUIDITY LONG RUN M2 MACROECONOMIC FACTORS MACROECONOMIC PERFORMANCE MACROECONOMIC VARIABLES MARKET IMPERFECTIONS MONETARY ECONOMICS MONETARY POLICY MONEY SUPPLY NEGATIVE RELATIONSHIP NEGATIVE SIGN NET WORTH OPEN ECONOMIES OUTPUT GROWTH OUTPUT VOLATILITY PER CAPITA CONSUMPTION PER CAPITA CONSUMPTION GROWTH PER CAPITA INCOME PER CAPITA INCOMES POLICY CHANGES POLICY RESEARCH POLITICAL ECONOMY POSITIVE COEFFICIENT POSITIVE EFFECT POSITIVE RELATIONSHIP POVERTY REDUCTION PRIVATE SECTOR PUBLIC SECTOR RANDOM EFFECTS REAL GDP REGRESSION TECHNIQUES RELATIVE IMPORTANCE RELATIVE SUPPLY RESOURCE ALLOCATION RISK MANAGEMENT SENSITIVITY ANALYSIS SIGNIFICANCE LEVEL SIGNIFICANT RELATIONSHIP SMOOTHING CONSUMPTION STANDARD DEVIATION TRANSACTIONS COSTS 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. 2014-08-27T18:11:29Z 2014-08-27T18:11:29Z 2000-11 http://documents.worldbank.org/curated/en/2000/11/748668/finance-macroeconomic-volatility http://hdl.handle.net/10986/19762 English en_US Policy Research Working Paper;No. 2487 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ACCOUNTING AGGREGATE OUTPUT AGGREGATE SUPPLY AGGREGATE SUPPLY CURVE ANNUAL GROWTH ANNUAL OBSERVATIONS ASYMMETRIC INFORMATION AVERAGE GROWTH AVERAGE GROWTH RATE AVERAGE LEVEL BANKING INDUSTRY BANKS BUSINESS CYCLE BUSINESS CYCLES CAPITAL FLOWS CAPITAL MARKET CAPITAL MARKETS CENTRAL BANK CONTAGION CORPORATE GOVERNANCE COUNTRY CHARACTERISTICS COUNTRY EFFECTS COUNTRY REGRESSIONS COUNTRY RESULTS COUNTRY SPECIFIC CREDIT MARKETS CROSS COUNTRY CROSS-COUNTRY COMPARISONS CROSS-COUNTRY DATA CROSS-COUNTRY REGRESSION CROSS-SECTIONAL DATA DATA AVAILABILITY DATA SET DATA SETS DEBT DEPENDENT VARIABLE DEVELOPED COUNTRIES DEVELOPMENT INDICATORS DIVERSIFICATION DOMESTIC CREDIT ECONOMIC ACTIVITY ECONOMIC DYNAMICS ECONOMIC EQUILIBRIUM ECONOMIC FLUCTUATIONS ECONOMIC GROWTH ECONOMIC LITERATURE ECONOMIC REVIEW ECONOMIC STUDIES ECONOMIC THEORY EMPIRICAL EVIDENCE EMPIRICAL LITERATURE EMPIRICAL RESULTS EMPIRICAL STUDIES EMPIRICAL WORK ENDOGENOUS GROWTH ERROR TERM ESTIMATION TECHNIQUES EXCHANGE RATE EXOGENOUS SHOCKS EXOGENOUS VARIABLE EXPLANATORY POWER EXTERNAL SHOCKS FINANCIAL DEVELOPMENT FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MANAGEMENT FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SECTORS FINANCIAL SYSTEMS FIXED EFFECTS FIXED EFFECTS ESTIMATION FOREIGN EXCHANGE GDP GROWTH LITERATURE GROWTH RATE GROWTH RATES GROWTH REGRESSIONS HIGH INCOME COUNTRIES IMPORTS INCOME INCOME GROWTH INDEPENDENT VARIABLES INDUSTRIALIZED COUNTRIES INFLATION INFLATION RATE INFORMATION ASYMMETRIES INTEREST RATE INVESTMENT OPPORTUNITIES LABOR MARKET LIQUIDITY LONG RUN M2 MACROECONOMIC FACTORS MACROECONOMIC PERFORMANCE MACROECONOMIC VARIABLES MARKET IMPERFECTIONS MONETARY ECONOMICS MONETARY POLICY MONEY SUPPLY NEGATIVE RELATIONSHIP NEGATIVE SIGN NET WORTH OPEN ECONOMIES OUTPUT GROWTH OUTPUT VOLATILITY PER CAPITA CONSUMPTION PER CAPITA CONSUMPTION GROWTH PER CAPITA INCOME PER CAPITA INCOMES POLICY CHANGES POLICY RESEARCH POLITICAL ECONOMY POSITIVE COEFFICIENT POSITIVE EFFECT POSITIVE RELATIONSHIP POVERTY REDUCTION PRIVATE SECTOR PUBLIC SECTOR RANDOM EFFECTS REAL GDP REGRESSION TECHNIQUES RELATIVE IMPORTANCE RELATIVE SUPPLY RESOURCE ALLOCATION RISK MANAGEMENT SENSITIVITY ANALYSIS SIGNIFICANCE LEVEL SIGNIFICANT RELATIONSHIP SMOOTHING CONSUMPTION STANDARD DEVIATION TRANSACTIONS COSTS
spellingShingle	ACCOUNTING AGGREGATE OUTPUT AGGREGATE SUPPLY AGGREGATE SUPPLY CURVE ANNUAL GROWTH ANNUAL OBSERVATIONS ASYMMETRIC INFORMATION AVERAGE GROWTH AVERAGE GROWTH RATE AVERAGE LEVEL BANKING INDUSTRY BANKS BUSINESS CYCLE BUSINESS CYCLES CAPITAL FLOWS CAPITAL MARKET CAPITAL MARKETS CENTRAL BANK CONTAGION CORPORATE GOVERNANCE COUNTRY CHARACTERISTICS COUNTRY EFFECTS COUNTRY REGRESSIONS COUNTRY RESULTS COUNTRY SPECIFIC CREDIT MARKETS CROSS COUNTRY CROSS-COUNTRY COMPARISONS CROSS-COUNTRY DATA CROSS-COUNTRY REGRESSION CROSS-SECTIONAL DATA DATA AVAILABILITY DATA SET DATA SETS DEBT DEPENDENT VARIABLE DEVELOPED COUNTRIES DEVELOPMENT INDICATORS DIVERSIFICATION DOMESTIC CREDIT ECONOMIC ACTIVITY ECONOMIC DYNAMICS ECONOMIC EQUILIBRIUM ECONOMIC FLUCTUATIONS ECONOMIC GROWTH ECONOMIC LITERATURE ECONOMIC REVIEW ECONOMIC STUDIES ECONOMIC THEORY EMPIRICAL EVIDENCE EMPIRICAL LITERATURE EMPIRICAL RESULTS EMPIRICAL STUDIES EMPIRICAL WORK ENDOGENOUS GROWTH ERROR TERM ESTIMATION TECHNIQUES EXCHANGE RATE EXOGENOUS SHOCKS EXOGENOUS VARIABLE EXPLANATORY POWER EXTERNAL SHOCKS FINANCIAL DEVELOPMENT FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MANAGEMENT FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SECTORS FINANCIAL SYSTEMS FIXED EFFECTS FIXED EFFECTS ESTIMATION FOREIGN EXCHANGE GDP GROWTH LITERATURE GROWTH RATE GROWTH RATES GROWTH REGRESSIONS HIGH INCOME COUNTRIES IMPORTS INCOME INCOME GROWTH INDEPENDENT VARIABLES INDUSTRIALIZED COUNTRIES INFLATION INFLATION RATE INFORMATION ASYMMETRIES INTEREST RATE INVESTMENT OPPORTUNITIES LABOR MARKET LIQUIDITY LONG RUN M2 MACROECONOMIC FACTORS MACROECONOMIC PERFORMANCE MACROECONOMIC VARIABLES MARKET IMPERFECTIONS MONETARY ECONOMICS MONETARY POLICY MONEY SUPPLY NEGATIVE RELATIONSHIP NEGATIVE SIGN NET WORTH OPEN ECONOMIES OUTPUT GROWTH OUTPUT VOLATILITY PER CAPITA CONSUMPTION PER CAPITA CONSUMPTION GROWTH PER CAPITA INCOME PER CAPITA INCOMES POLICY CHANGES POLICY RESEARCH POLITICAL ECONOMY POSITIVE COEFFICIENT POSITIVE EFFECT POSITIVE RELATIONSHIP POVERTY REDUCTION PRIVATE SECTOR PUBLIC SECTOR RANDOM EFFECTS REAL GDP REGRESSION TECHNIQUES RELATIVE IMPORTANCE RELATIVE SUPPLY RESOURCE ALLOCATION RISK MANAGEMENT SENSITIVITY ANALYSIS SIGNIFICANCE LEVEL SIGNIFICANT RELATIONSHIP SMOOTHING CONSUMPTION STANDARD DEVIATION TRANSACTIONS COSTS Denizer, Cevdet Iyigun, Murat F. Owen, Ann L. Finance and Macroeconomic Volatility
relation	Policy Research Working Paper;No. 2487
description	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.
format	Publications & Research :: Policy Research Working Paper
author	Denizer, Cevdet Iyigun, Murat F. Owen, Ann L.
author_facet	Denizer, Cevdet Iyigun, Murat F. Owen, Ann L.
author_sort	Denizer, Cevdet
title	Finance and Macroeconomic Volatility
title_short	Finance and Macroeconomic Volatility
title_full	Finance and Macroeconomic Volatility
title_fullStr	Finance and Macroeconomic Volatility
title_full_unstemmed	Finance and Macroeconomic Volatility
title_sort	finance and macroeconomic volatility
publisher	World Bank, Washington, DC
publishDate	2014
url	http://documents.worldbank.org/curated/en/2000/11/748668/finance-macroeconomic-volatility http://hdl.handle.net/10986/19762
_version_	1764440574660706304

Finance and Macroeconomic Volatility

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