Abstract

We examine the relationship between intermediaries, stock markets, and real activity in four East Asian crisis economies (Indonesia, Korea, Malaysia, and Thailand) using a series of comparative vector autoregressive and error correction models with quarterly data from 1995 through 2010, thus including both the financial crises of 1997–1998 and 2008–2009. Although we find generally positive effects of stock market development and liquidity on growth and investment for all four countries, expansion in traditional measures of financial development do not promote growth, and even have strongly negative effects for Indonesia and Korea. The results from these economies suggest that credit can build up to the point of “saturation,” and that a well-functioning stock market can serve as a growth-promoting outlet for funds as a financial system expands and evolves.

Full Text
Paper version not known

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call

Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.