Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/71280
Authors: 
Hagen, Tobias
Year of Publication: 
2013
Series/Report no.: 
Economics Discussion Papers 2013-26
Abstract: 
Using cross-country data, this paper estimates the impact of the 2007 financial shock on countries' macroeconomic developments conditional on national financial regulations before the crisis. For this purpose, the financial reform index developed by Abiad et al. (A New Database of Financial Reforms, 2008) is used. The econometric analyses indicate that countries with more deregulated financial markets experienced deeper recessions, stronger employment losses, and larger government budget deficits. Against the background of the ongoing global crisis and the results of other studies, the usefulness of liberalized financial markets for macroeconomic stability and economic development should be rigorously reconsidered.
Subjects: 
financial crisis
financial regulation
Great Recession
robust regression
semiparametric regression
JEL: 
C21
E32
G18
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/
Document Type: 
Working Paper

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