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Inflation and Financial Development: Evidence from Brazil

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  • Bittencourt, Manoel

Abstract

We examine the impact of inflation on financial development in Brazil and the data available permit us to cover the period between 1985 and 2002. The results?based initially on time-series and then on panel time-series data and analysis, and robust for different estimators and financial development measures?suggest that inflation presented deleterious effects on financial development at the time. The main implication of the results is that poor macroeconomic performance, exemplified in Brazil by high rates of inflation, have detrimental effects to financial development, a variable that is important for affecting, e.g. economic growth and income inequality. Therefore, low and stable inflation, and all that it encompasses, is a necessary first step to achieve a deeper and more active financial sector with all its attached benefits. --

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Paper provided by Verein für Socialpolitik, Research Committee Development Economics in its series Proceedings of the German Development Economics Conference, Göttingen 2007 with number 1.

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Date of creation: 2007
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Handle: RePEc:zbw:gdec07:6524

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Keywords: Financial development; inflation; Brazil;

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Cited by:
  1. Alimi, R. Santos, 2014. "Inflation and Financial Sector Performance: The Case Of Nigeria," MPRA Paper 57180, University Library of Munich, Germany.
  2. Bittencourt, Manoel, 2011. "Financial Development and Economic Growth in Latin America: Is Schumpeter Right?," Proceedings of the German Development Economics Conference, Berlin 2011, Verein für Socialpolitik, Research Committee Development Economics 13, Verein für Socialpolitik, Research Committee Development Economics.
  3. Abu N. M. Wahid & Muhammad Shahbaz & Pervaz Azim, 2011. "Inflation and Financial Sector Correlation: The Case of Bangladesh," International Journal of Economics and Financial Issues, Econjournals, Econjournals, vol. 1(4), pages 145-152.
  4. Manoel Bittencourt & Rangan Gupta & Lardo Stander, 2013. "Tax evasion, financial development and inflation: theory and empirical evidence," Working Papers, University of Pretoria, Department of Economics 201316, University of Pretoria, Department of Economics.
  5. Satti, Saqlain Latif & Shahbaz, Muhammad & Mujahid, Nooreen & Ali, Amjad, 2013. "Impact of Financial Development and Globalization on Inflation: The Role of Remittance and Economic Growth in Bangladesh," MPRA Paper 51675, University Library of Munich, Germany, revised 21 Nov 2013.
  6. Manoel Bittencourt, 2011. "Is Copacabana Still the ‘Little Princess of the Sea’?," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, Ifo Institute for Economic Research at the University of Munich, vol. 12(1), pages 11-16, 03.
  7. Manoel Bittencourt, 2010. "Financial Development and Economic Growth in Latin America: Schumpeter is Right!," Working Papers, University of Pretoria, Department of Economics 201014, University of Pretoria, Department of Economics.
  8. Matthias Hartmann & Helmut Herwartz & Yabibal M. Walle, 2012. "Where enterprise leads, finance follows. In-sample and out-of-sample evidence on the causal relation between finance and growth," Economics Bulletin, AccessEcon, vol. 32(1), pages 871-882.

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