nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2021‒11‒01
three papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. The relationship between Financial Inclusion and Monetary Stability in Mozambique: Analysis based on an Error Correction Model (VECM) By Carla Fernandes; Maria Rosa Borges; Esselina Macome; Jorge Caiado
  2. Financial Inclusion and Resilience to COVID-19 Economic Shocks: Evidence from Kenya, Nigeria, and Uganda By Abbie Turiansky; Erin Lipman; Arif Mamun; Cullen Seaton; Jonathan Gellar; Sarah Hughes
  3. Household Credit as Stimulus? Evidence from Brazil By Gabriel Garber; Atif R. Mian; Jacopo Ponticelli; Amir Sufi

  1. By: Carla Fernandes; Maria Rosa Borges; Esselina Macome; Jorge Caiado
    Abstract: The present work aims to assess the existence of the relationship between financial inclusion and monetary stability in Mozambique based on the analysis of the vector correction error model (VECM) for the period from 2005 to 2020. The indicators used in the study follow the approach taken by Mbutor and Uba (2013), Lapukent (2015), Lenka and Bairwa (2016) and Hung (2016). In addition to indicators of traditional banking institutions, this article goes further by also incorporating indicators relating to services of electronic money institutions with the objective of capturing the impact of digital financial services on financial inclusion and their role in financial stability. The study presents results consistent with economic theory. The long-term VEC model proved to be statistically significant and confirmed the existence of a long-term relationship between financial inclusion and monetary stability. It also revealed that the deviation of the CPI from its long-term equilibrium is adjusted at a speed of 10.19%. The coefficients of the short-term VEC model were negative for the variables of branches and bank accounts. The coefficients of agents and EMI accounts were not positive, and their shocks are removed after 6 quarters, after which the expected negative sign is observed achieving monetary stability.
    Keywords: Financial Inclusion; Monetary Stability; VEC Model; Digital Financial Services JEL Classification: G20, G21, G28.
    Date: 2021–01
  2. By: Abbie Turiansky; Erin Lipman; Arif Mamun; Cullen Seaton; Jonathan Gellar; Sarah Hughes
    Abstract: We examine whether financial inclusion may help mitigate the effects of the COVID-19 pandemic on households’ economic behavior and well-being in three Sub-Saharan African countries: Kenya, Nigeria, and Uganda.
    Keywords: financial iclusion, COVID-19, economic shocks, Kenya, Nigeria, Uganda, international
  3. By: Gabriel Garber; Atif R. Mian; Jacopo Ponticelli; Amir Sufi
    Abstract: From 2011 to 2014, the Brazilian government conducted a heavily advertised major credit expansion program through government banks as part of its effort to stimulate the economy. Using administrative data on individual-level borrowing and spending, we find that the program led to a substantial rise in borrowing by government employees, especially those with low financial literacy. We trace the impact of credit stimulus on borrowers' consumption through the 2011-16 business cycle, and find that the credit stimulus resulted in higher consumption volatility and lower average consumption over the cycle. Our results suggest a potential downside of using household credit as stimulus in emerging markets.
    JEL: D12 D14 E21 E32 G21 G28 G53 O16
    Date: 2021–10

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