Financial Depth and the Asymmetric Impact of Monetary Policy

Mustafa Caglayan, Ozge Kandemir Kocaaslan, Kostas Mouratidis

Research output: Contribution to journalArticlepeer-review

5 Citations (Scopus)
22 Downloads (Pure)


This paper investigates the importance of financial depth in evaluating the asymmetric impact of monetary policy on real output over the course of the US business cycle. We show that monetary policy has a signicant impact on output growth during recessions. We also show that financial deepening plays an important role by dampening the effects of monetary policy shocks in recessions. The results are robust to the use of alternative financial depth and monetary policy shock measures as well as to two different sample periods.
Original languageEnglish
Pages (from-to)1195-1218
Number of pages24
JournalOxford Bulletin of Economics and Statistics
Issue number6
Early online date21 Feb 2017
Publication statusPublished - 2 Nov 2017

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