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Relationship between financial inclusion, monetary policy and financial stability: An analysis in high financial development and low financial development countries
This article studies the linkage between financial inclusion, monetary policy and financial stability in 58 countries including 31 high financial development countries (HFDCs) and 27 low financial development countries (LFDCs) from 2004 to 2020 using the PVAR method. Results of impulse – response fu...
Autores principales: | , , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Elsevier
2023
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10248120/ https://www.ncbi.nlm.nih.gov/pubmed/37303523 http://dx.doi.org/10.1016/j.heliyon.2023.e16647 |
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author | Oanh, Tran Thi Kim Van, Le Thi Thuy Dinh, Le Quoc |
author_facet | Oanh, Tran Thi Kim Van, Le Thi Thuy Dinh, Le Quoc |
author_sort | Oanh, Tran Thi Kim |
collection | PubMed |
description | This article studies the linkage between financial inclusion, monetary policy and financial stability in 58 countries including 31 high financial development countries (HFDCs) and 27 low financial development countries (LFDCs) from 2004 to 2020 using the PVAR method. Results of impulse – response function suggest that in LFDCs, while financial inclusion and financial stability are positively correlated, they are negatively correlated with the inflation rate and the money supply growth rate. In HFDCs, financial inclusion is positively corelated with inflation rate and money supply growth rate, while financial stability is negatively correlated with financial inclusion, inflation rate and money supply growth rate. These findings imply that in LFDCs, financial inclusion increases financial stability and reduces inflation. In HFDCs, on the contrary, financial inclusion increases financial instability, leading to long-term inflation. The results of the variance decomposition confirm the above outcomes, specifically, this relationship is clearer in HFDCs. From the above findings, we propose some policy recommendations on financial inclusion and monetary policy for financial stability for each group of countries. |
format | Online Article Text |
id | pubmed-10248120 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2023 |
publisher | Elsevier |
record_format | MEDLINE/PubMed |
spelling | pubmed-102481202023-06-09 Relationship between financial inclusion, monetary policy and financial stability: An analysis in high financial development and low financial development countries Oanh, Tran Thi Kim Van, Le Thi Thuy Dinh, Le Quoc Heliyon Research Article This article studies the linkage between financial inclusion, monetary policy and financial stability in 58 countries including 31 high financial development countries (HFDCs) and 27 low financial development countries (LFDCs) from 2004 to 2020 using the PVAR method. Results of impulse – response function suggest that in LFDCs, while financial inclusion and financial stability are positively correlated, they are negatively correlated with the inflation rate and the money supply growth rate. In HFDCs, financial inclusion is positively corelated with inflation rate and money supply growth rate, while financial stability is negatively correlated with financial inclusion, inflation rate and money supply growth rate. These findings imply that in LFDCs, financial inclusion increases financial stability and reduces inflation. In HFDCs, on the contrary, financial inclusion increases financial instability, leading to long-term inflation. The results of the variance decomposition confirm the above outcomes, specifically, this relationship is clearer in HFDCs. From the above findings, we propose some policy recommendations on financial inclusion and monetary policy for financial stability for each group of countries. Elsevier 2023-05-30 /pmc/articles/PMC10248120/ /pubmed/37303523 http://dx.doi.org/10.1016/j.heliyon.2023.e16647 Text en © 2023 The Authors https://creativecommons.org/licenses/by-nc-nd/4.0/This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). |
spellingShingle | Research Article Oanh, Tran Thi Kim Van, Le Thi Thuy Dinh, Le Quoc Relationship between financial inclusion, monetary policy and financial stability: An analysis in high financial development and low financial development countries |
title | Relationship between financial inclusion, monetary policy and financial stability: An analysis in high financial development and low financial development countries |
title_full | Relationship between financial inclusion, monetary policy and financial stability: An analysis in high financial development and low financial development countries |
title_fullStr | Relationship between financial inclusion, monetary policy and financial stability: An analysis in high financial development and low financial development countries |
title_full_unstemmed | Relationship between financial inclusion, monetary policy and financial stability: An analysis in high financial development and low financial development countries |
title_short | Relationship between financial inclusion, monetary policy and financial stability: An analysis in high financial development and low financial development countries |
title_sort | relationship between financial inclusion, monetary policy and financial stability: an analysis in high financial development and low financial development countries |
topic | Research Article |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10248120/ https://www.ncbi.nlm.nih.gov/pubmed/37303523 http://dx.doi.org/10.1016/j.heliyon.2023.e16647 |
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