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Understanding the Relationship between Financial Development and Monetary Policy

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  • Luis Carranza

    ()
    (Universidad San Martín de Porres)

  • José Enrique Galdón Sánchez

    ()
    (Universidad Pública de Navarra)

  • Javier Gómez Biscarri

    ()
    (Universitat Pompeu Fabra)

Abstract

In this paper we summarize the results of a broad exploratory empirical analysis where we relate the level of financial development with the effectiveness of monetary policy. The analysis is based on a panel of countries for whom we calculate measures both of financial development and of monetary policy effectiveness. We look for statistically significant relationships between the indicators of financial development, the effectiveness coefficients and other macroeconomic characteristics by estimating dynamic panels and performing a cluster analysis. We present our results in the form of a list of stylized facts that we consider deserve further attention.

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Bibliographic Info

Paper provided by School of Economics and Business Administration, University of Navarra in its series Faculty Working Papers with number 14/06.

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Length: 30 pages
Date of creation: 25 Oct 2009
Date of revision:
Handle: RePEc:una:unccee:wp1406

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Web page: http://www.unav.es/facultad/econom

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Keywords: Financial Development; Monetary Policy Effectiveness; Dynamic Panel; Empirical Measures;

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