Length of Crises and Financial Development

Published on July 15, 2021 – Updated on July 15, 2021
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on the July 15, 2021

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Length of Crises and Financial Development


A large literature looks at the influence of financial development on the costs in terms of output of crises. Our contribution takes a somewhat different path, by looking at the impact of financial development on the length of banking crises. Using a large database spanning over almost found decades, our estimations show that on average the length of crises is statistically higher in countries with higher financial development. Confirmed by various robustness tests, this finding exhibits various heterogeneities related, among others, to the time period or countries’ economic development level.

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