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Financial development and the magnitude of business cycle fluctuations in OECD countries

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  • Jarko Fidrmuc
  • Johann Scharler

Abstract

We study empirically how the development of financial systems influences the magnitude of output growth fluctuations in a sample of OECD countries between 1995 and 2005. While the development of banking sectors is not significantly related to the magnitude of macroeconomic fluctuations, countries characterized by developed stock markets experience less pronounced fluctuations.

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  • Jarko Fidrmuc & Johann Scharler, 2013. "Financial development and the magnitude of business cycle fluctuations in OECD countries," Applied Economics Letters, Taylor & Francis Journals, vol. 20(6), pages 530-533, April.
    • Handle: RePEc:taf:apeclt:v:20:y:2013:i:6:p:530-533
    DOI: 10.1080/13504851.2012.718055
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