Financial Intermediary Development and Growth Volatility : Do Intermediaries Dampen or Magnify Shocks?

Beck, Thorsten ; Lundberg, Mattias ; Majnoni, Giovanni

World Bank, Washington, DC

关键词: ACCELERATOR;    ACCELERATOR EFFECT;    ASYMMETRIC INFORMATION;    BALANCE SHEETS;    BANK LENDING;   

DOI  :  10.1596/1813-9450-2707
RP-ID  :  WPS2707

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The authors extend the recent literatureon the link between financial development and economicvolatility by focusing on the channels through which thedevelopment of financial intermediaries affects economicvolatility. Their theoretical model predicts thatwell-developed financial intermediaries dampen the effect ofreal sector shocks on the volatility of growth whilemagnifying the effect of monetary shocks-suggesting that,overall, financial intermediaries have no unambiguous effecton growth volatility. The authors test these predictions ina panel data set covering 63 countries over the period1960-97, using the volatility of terms of trade to proxy forreal volatility, and the volatility of inflation to proxyfor monetary volatility. They find no robust relationshipbetween the development of financial intermediaries andgrowth volatility, weak evidence that financialintermediaries dampen the effect of terms of tradevolatility, and evidence that financial intermediariesmagnify the impact of inflation volatility in low- andmiddle-income countries.