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Inflation and Financial Depth Author info | Abstract | Publisher info | Download info | Related research | Statistics Bruce D. Smith
Mohsin S. Khan
A. Senhadji Semlali
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There is now a substantial theoretical literature arguing that inflation impedes financial deepening. Furthermore, it has been hypothesized that the relationship is a nonlinear one, in that there is a threshold level of inflation below which inflation has a positive effect on financial depth, but above which the effect turns negative. Using a large cross-country sample, empirical support is found for the existence of such a threshold. The estimates indicate that the threshold level of inflation is generally between 3 and 6 percent a year, depending on the specific measure of financial depth that is used.
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Paper provided by International Monetary Fund in its series IMF Working Papers with number
01/44.
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Keywords: Inflation ; Markets ; Economic models ; Other versions of this item:
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Full
references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
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"Inflation in Pakistan ,"
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Staff General Research Papers
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