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Relative Price Stability, Creditor Rights, and Financial Deepening

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Listed:
  • Mr. Pablo F Druck
  • Mr. Alexander Plekhanov
  • Mr. Mario Dehesa

Abstract

The paper provides a theoretical and cross-country empirical analysis of the determinants of financial deepening, and finds that higher credit-to-GDP ratios are associated with stronger creditor rights and lower inflation, and that the marginal effect of improvements in creditor rights protection is declining as the rate of inflation increases. The analysis suggests that in a high inflation environment, controlling inflation and reducing macroeconomic volatility should be given priority. Once these goals are achieved, the focus of attention should shift to creditor rights protection and credit information management.

Suggested Citation

  • Mr. Pablo F Druck & Mr. Alexander Plekhanov & Mr. Mario Dehesa, 2007. "Relative Price Stability, Creditor Rights, and Financial Deepening," IMF Working Papers 2007/139, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2007/139
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    References listed on IDEAS

    as
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