Resumen de Understanding the Relationship between Financial Development and Monetary Policy

Luis Carranza, Javier Gomez Biscarri, José Enrique Galdón Sánchez

• In this paper we summarize the results of a broad exploratory empirical analysis where we attempt to relate the level of financial development with the effectiveness of monetary policy. The analysis is based on a panel of sixty plus countries for whom we calculate measures both of financial development and of monetary policy effectiveness. We correlate the above measures and other macroeconomic variables to look for statistically significant relationships between the indicators of financial development, the effectiveness coefficients and other country characteristics. We present our results in the form of a list of stylized facts that deserve to be given future attention. Given the focus of the analysis on financial development, our results have important implications for emerging markets.