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Financial development and household portfolios - Evidence from Spain, the U.K. and the U.S

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  • Antzoulatos, Angelos A.
  • Tsoumas, Chris

Abstract

We examine the impact of financial development on the composition of household portfolios in Spain, the U.K. and the U.S., three countries whose financial systems underwent profound changes over the past two decades and for which relevant data exist for sufficiently long time periods. We find a 'division of labour' between the indices measuring financial development and asset returns, the first affecting mainly the long-run dynamics of household portfolios and the second the short-run dynamics; both, however, in an economically reasonable way. Among the notable results pertaining to long-run dynamics, more competitive financial intermediaries are associated with a higher share of currency and deposits and a lower share of equity. For the short-run dynamics, the most important driver is stock market returns.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of International Money and Finance.

Volume (Year): 29 (2010)
Issue (Month): 2 (March)
Pages: 300-314

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Handle: RePEc:eee:jimfin:v:29:y:2010:i:2:p:300-314

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Web page: http://www.elsevier.com/locate/inca/30443

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Keywords: Financial development indices Financial intermediaries Household portfolios;

References

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Cited by:
  1. Jakob B Madsen & Hui Yao, 2012. "Wealth Effects In Consumption: The Financial Accelerator And Banks’ Willingness To Lend," Development Research Unit Working Paper Series 56-12, Monash University, Department of Economics.

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