## Monetization in Low- and Middle-Income Countries

_IMF Working Papers, June 1, 2012_

## Source details

**Canonical URL:** [Monetization in Low- and Middle-Income Countries](https://www.imf.org/en/publications/wp/issues/2016/12/31/monetization-in-low-and-middle-income-countries-26010)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/31/monetization-in-low-and-middle-income-countries-26010/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/31/monetization-in-low-and-middle-income-countries-26010/index.json)
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## Bibliographic details
- Authors: Noriaki Kinoshita, Cameron McLoughlin
- Published: June 1, 2012
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475504651.001

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### Overview and research question
- Examines the degree of an economy’s monetization and its implications for economic growth.
- Defines monetization as the ratio of broad money to nominal GDP.
- Investigates drivers of monetization in low- to middle-income countries and policy implications.

### Key findings
- Monetization (broad money to nominal GDP) in low- to middle-income countries is significantly correlated with:
  - per-capita GDP,
  - real interest rates,
  - financial sector reform.
- Episodes of financial crises, the conduct of monetary policy, and financial sector reform can affect the degree of monetization.
- Maintaining an upward momentum in monetization is identified as an important policy objective, particularly for low-income countries.

### Policy implications and recommendations
- Monetary and financial sector policies should be conducive to enhancing monetization.
- Financial sector reform is highlighted as a key channel for increasing monetization.
- Preservation of favorable real interest rate conditions can support monetization progress.

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## Content in this bundle

- **5. Main Results: Multivariate Regressions**
  - [5. Main Results: Multivariate Regressions (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2012/_wp12160.pdf.md){rel="alternate" type="text/markdown"}
  - [5. Main Results: Multivariate Regressions (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2012/_wp12160.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/monetization-in-low-and-middle-income-countries-26010_