01964cas a2200253 a 4500 AALejournalIMF013342 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475543988 1018-5941 BD-DhAAL BD-DhAAL Dabla-Norris, Era. Revisiting the Link Between Finance and Macroeconomic Volatility / Era Dabla-Norris, Narapong Srivisal. Washington, D.C. : International Monetary Fund, 2013. 1 online resource (36 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper examines the impact of financial depth on macroeconomic volatility using a dynamic panel analysis for 110 advanced and developing countries. We find that financial depth plays a significant role in dampening the volatility of output, consumption, and investment growth, but only up to a certain point. At very high levels, such as those observed in many advanced economies, financial depth amplifies consumption and investment volatility. We also find strong evidence that deeper financial systems serve as shock absorbers, mitigating the negative effects of real external shocks on macroeconomic volatility. This smoothing effect is particularly pronounced for consumption volatility in environments of high exposure - when trade and financial openness are high - suggesting significant gains from further financial deepening in developing countries. Mode of access: Internet Srivisal, Narapong. IMF Working Papers; Working Paper ; No. 2013/029 Full text available on IMF http://elibrary.imf.org/view/journals/001/2013/029/001.2013.issue-029-en.xml IMF e-Library