Financial Depth and the Asymmetric Impact of Monetary Policy

Mustafa Caglayan, Ozge Kandemir Kocaaslan, Kostas Mouratidis

    Research output: Contribution to journalArticlepeer-review

    10 Citations (Scopus)
    36 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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