Stress-ridden finance and growth losses : does financial development break the link? / Serafín Martínez-Jaramillo, Ricardo Montañez-Enríquez, Matias Ossandon Busch, Manuel Ramos-Francia, Anahí Rodríguez-Martínez, José Manuel Sánchez-Martínez
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Stress-ridden finance and growth losses
Discovery
1787821633
URN
urn:nbn:de:gbv:3:2-146002
DOI
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Publication history
Halle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, [28. Januar 2022]
Content
1 Online-Ressource (III, 47 Seiten, 1,79 MB) : Diagramme
Edition
Language
eng
Comment
Abstract
Does financial development shield countries from the pass-through of financial shocks to real outcomes? We evaluate this question by characterising the probability density of expected GDP growth conditional on financial stability indicators in a panel of 28 countries. Our robust results unveil a non-linear nexus between financial stability and expected GDP growth, depending on countries’ degree of financial development. While both domestic and global financial factors affect expected growth, the effect of global factors is moderated by financial development. This result highlights a previously unexplored channel trough which financial development can break the link between financial (in)stability and GDP growth.
Series
IWH-Diskussionspapiere ; 2022, no. 3 (January 2022) ppn:837399270