nep-fdg New Economics Papers
on Financial Development and Growth
Issue of 2007‒09‒24
one paper chosen by
Iulia Igescu
Global Insight, GmbH

  1. Capital Market and Business Cycle Volatility By Tharavanij, Piyapas

  1. By: Tharavanij, Piyapas
    Abstract: This paper investigates cross-country evidence on how capital market affects business cycle volatility. In contrast to the large and growing literature on the impact of finance and growth, empirical work on the relationship between finance and volatility has been relatively scarce. Theoretically, more developed capital market should lead to lower macroeconomic volatility. The major finding is that countries with more developed capital market have smoother economic fluctuations. Results are generated using panel estimation technique with panel data from 44 countries covering the years 1975 through 2004.
    Keywords: business cycle; capital market; financial development; financial structure; panel data; market-based; bank-based
    JEL: G00 G21 E44 E32 C33
    Date: 2007–09–09

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