Financial inclusion, macroprudential policy, and crisis
The study examines the role played by financial inclusion (FI) and macroprudential policy (MPP) to prevent financial crisis or reduce the severity of a financial crisis going forward using a panel of 138 countries covering the years 2004- 2017. To attain these objectives through robust e...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Faculty of Economics, Belgrade
2023-01-01
|
| Series: | Ekonomski Anali |
| Subjects: | |
| Online Access: | https://doiserbia.nb.rs/img/doi/0013-3264/2023/0013-32642338041S.pdf |
| Summary: | The study examines the role played by financial inclusion (FI) and
macroprudential policy (MPP) to prevent financial crisis or reduce the
severity of a financial crisis going forward using a panel of 138 countries
covering the years 2004- 2017. To attain these objectives through robust
experimentation and support policy formulation, we employ aggregated
measures of FI and MPP and use advanced econometric models. Our findings
show that, although FI initially decreases the likelihood of a crisis, the
probability of a crisis increases after a certain level of inclusion is
reached. In contrast, countries with MPP are less likely to have a crisis
than countries without MPP. Furthermore, the FI-MPP interaction complements
itself and plays a vital role in reducing the likelihood of a crisis. Our
results are robust and could be useful for policymakers to formulate
policies in order to prevent a crisis or reduce its severity going forward. |
|---|---|
| ISSN: | 0013-3264 1820-7375 |