Dynamic effects of financial intermediation over the business cycle |
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| Authors: | CS Lehr P Wang |
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| Institution: | Department of Economics, Virginia Commonwealth University, Richmond, VA, USA Phone: 804 828 7148 Fax: 804 828 1719 E-mail:;Department of Economics, Vanderbilt University, Nashville, TN, USA Phone: 615 322 2388 Fax: 615 343 8495 E-mail: |
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| Abstract: | This paper provides a empirical evidence that the financial intermediation disturbances can generate business cycles. We examine three countries whose financial sectors are fully developed but quite distinct in their institutional and regulatory circumstances; thus, we can infer whether financial intermediation disturbances differ across dissimilar financial environments. We find that the dynamic responses of output to financial intermediation shocks exhibit similar patterns in all cases studied. However, the various institutional and regulatory circumstances have generated different propagation mechanisms transmitting the financial disturbance to output in ways that lead the magnitudes of the responses to deviate across economies. |
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