Financial Depth and the Asymmetric Impact of Monetary Policy

Mustafa Caglayan; Ozge Kandemir Kocaaslan; Kostas Mouratidis

doi:10.1111/obes.12160

Financial Depth and the Asymmetric Impact of Monetary Policy

Mustafa Caglayan, Ozge Kandemir Kocaaslan, Kostas Mouratidis

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Abstract

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 language	English
Pages (from-to)	1195-1218
Number of pages	24
Journal	Oxford Bulletin of Economics and Statistics
Volume	79
Issue number	6
Early online date	21 Feb 2017
DOIs	https://doi.org/10.1111/obes.12160
Publication status	Published - 2 Nov 2017

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10.1111/obes.12160

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This is the accepted version of the following article: Caglayan, M., Kandemir Kocaaslan, O. and Mouratidis, K. (2017). Financial Depth and the Asymmetric Impact of Monetary Policy. Oxford Bulletin of Economics and Statistics, 79(6), pp.1195-1218., which has been published in final form at https://doi.org/10.1111/obes.12160. This article may be used for non-commercial purposes in accordance with the Wiley Self-Archiving Policy.
Accepted author manuscript, 416 KBLicence: All Rights Reserved

Mustafa Caglayan
- M.Caglayanhw.acuk
- School of Social Sciences, Edinburgh Business School - Professor
- School of Social Sciences - Professor
Person: Academic (Research & Teaching)

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Financial Depth and the Asymmetric Impact of Monetary Policy

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