Relative Price Stability, Creditor Rights, and Financial Deepening
IMF Working Papers, June 1, 2007
Source details
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- Relative Price Stability, Creditor Rights, and Financial Deepening
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Bibliographic details
- Authors: Pablo F Druck, Alexander Plekhanov, Mario Dehesa
- Published: June 1, 2007
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451867039.001
Summary and main findings
- The paper provides a theoretical and cross-country empirical analysis of the determinants of financial deepening.
- Higher credit-to-GDP ratios are associated with stronger creditor rights and lower inflation.
- The marginal effect of improvements in creditor rights protection is declining as the rate of inflation increases.
Policy implications
- In a high inflation environment, controlling inflation and reducing macroeconomic volatility should be given priority.
- Once inflation control and macroeconomic stability are achieved, focus should shift to:
- Creditor rights protection.
- Credit information management.
Subjects and keywords
- Subjects: Banking, Credit, Domestic credit, Inflation, Self-employment
- Keywords: interest rate, WP