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Desarrollo financiero y volatilidad del crecimiento económico: Evidencia para México y Estados Unidos

Author

Listed:
  • Rodolfo Cermeño

    (Division of Economics, CIDE)

  • María José Roa García
  • Claudio González Vega

Abstract

The paper explores the influences of financial development on economic growth and its volatility. First, it discusses the theoretical literature that attempts to explain these relationships. Then, it presents time series evidence for the cases of Mexico and the US. We use GARCH models, which make it possible to model volatility as a dynamic process and to interprete it as the inherent uncertainty in the process. The results suggest that, in the case of the US, financial development is positively associated with economic growth but that it does not show any relationship with volatility. In the Mexican case, we find that financial development may have had a positive effect on the rate of output growth by reducing its volatility.

Suggested Citation

  • Rodolfo Cermeño & María José Roa García & Claudio González Vega, 2006. "Desarrollo financiero y volatilidad del crecimiento económico: Evidencia para México y Estados Unidos," Working Papers DTE 377, CIDE, División de Economía.
    • Handle: RePEc:emc:wpaper:dte377
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    File URL: http://www.economiamexicana.cide.edu/RePEc/emc/pdf/DTE/DTE377.pdf
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    More about this item

    Keywords

    financial development; economic growth; volatility; GARCH models; Mexico;
    All these keywords.

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection

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