Relative Price Stability, Creditor Rights, and Financial Deepening

23 Pages Posted: 23 Aug 2007

See all articles by Mario Dehesa

Mario Dehesa

International Monetary Fund (IMF)

Pablo Druck

International Monetary Fund (IMF)

Alexander Plekhanov

International Monetary Fund (IMF)

Date Written: June 2007

Abstract

The paper provides a theoretical and cross-country empirical analysis of the determinants of financial deepening, and finds that higher credit-to-GDP ratios are associated with stronger creditor rights and lower inflation, and that the marginal effect of improvements in creditor rights protection is declining as the rate of inflation increases. The analysis suggests that in a high inflation environment, controlling inflation and reducing macroeconomic volatility should be given priority. Once these goals are achieved, the focus of attention should shift to creditor rights protection and credit information management.

Keywords: Working Paper, Credit, Inflation, Debt management

Suggested Citation

Dehesa, Mario and Druck, Pablo and Plekhanov, Alexander, Relative Price Stability, Creditor Rights, and Financial Deepening (June 2007). IMF Working Paper No. 07/139, Available at SSRN: https://ssrn.com/abstract=1007888

Mario Dehesa (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Pablo Druck

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Alexander Plekhanov

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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