Inflation and Financial Development: Evidence from Brazil

Manoel Bittencourt

No 1, Proceedings of the German Development Economics Conference, Göttingen 2007 from Verein für Socialpolitik, Research Committee Development Economics

Abstract: We examine the impact of inflation on financial development in Brazil and the data available permit us to cover the period between 1985 and 2002. The results?based initially on time-series and then on panel time-series data and analysis, and robust for different estimators and financial development measures?suggest that inflation presented deleterious effects on financial development at the time. The main implication of the results is that poor macroeconomic performance, exemplified in Brazil by high rates of inflation, have detrimental effects to financial development, a variable that is important for affecting, e.g. economic growth and income inequality. Therefore, low and stable inflation, and all that it encompasses, is a necessary first step to achieve a deeper and more active financial sector with all its attached benefits.

Keywords: Financial development; inflation; Brazil (search for similar items in EconPapers)
JEL-codes: E31 E44 O11 O54 (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-dev, nep-mac and nep-mon
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Related works:
Journal Article: Inflation and financial development: Evidence from Brazil (2011)
Journal Article: Inflation and financial development: Evidence from Brazil (2011)
Working Paper: Inflation and Financial Development: Evidence from Brazil (2008)
Working Paper: Inflation and Financial Development: Evidence from Brazil (2008)
Working Paper: Inflation and Financial Development: Evidence from Brazil (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:gdec07:6524

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