Effects of inflation on financial sector performance: New evidence from panel quantile regressions

Miguel Tinoco Zermeño, Francisco Venegas Martínez, Víctor Torres Preciado
2018 Investigación Económica   unpublished
This paper explores the influence of inflation on the conditional distribution of financial development, an issue that has not received attention in related literature, with data from 84 countries covering the 1980-2010 period. In our data we show the presence of fixed effects, reject cross-sectional dependence in the error structure and justify poolability. Our empirical strategy employs standard and fixed-effects quantile regressions to demonstrate that the influence of inflation varies along
more » ... lation varies along the quantiles of the conditional finance distribution. In general, we find a consistently negative and nonlinear effect of price increases on financial variables; in particular, it is statistically significant in the full sample of countries, significant in developing countries, and insignificant in developed countries. Resumen Este artículo explora la influencia de la inflación sobre la distribución condi-cional del desarrollo financiero, un tema que ha recibido poca atención en la literatura, con datos de 84 países para el periodo 1980-2010. Probamos la pre-sencia de efectos fijos, rechazamos la dependencia de sección cruzada en los artículo
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