The DOI matches its Crossref record; 30 of the 30 references it cites were found in a registry or an index.
Financial development and the instability of open economies
Open accessAbstract
This paper introduces a framework for analyzing the role of financial factors as a source of instability in small open economies. Our basic model is a dynamic open economy model with a tradeable good produced with capital and a country-specific factor. We also assume that firms face credit constraints, with the constraint being tighter at a lower level of financial development. A basic implication of this model is that economies at an intermediate level of financial development are more unstable than either very developed or very underdeveloped economies. This is true both in the sense that temporary shocks have large and persistent effects and also in the sense that these economies can exhibit cycles. Thus, countries that are going through a phase of financial development may become more unstable in the short run. Similarly, full capital account liberalization may destabilize the economy in economies at an intermediate level of financial development: phases of growth with capital inflows are followed by collapse with capital outflows. On the other hand, foreign direct investment does not destabilize.
Overview
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Integrity signals
Registry
Cites
Statistics
Verification
Claims the paper makes
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Self-check
Percentages, sums and reported differences re-computed from the paper’s own numbers.
The self-check needs the paper’s full text.
Citations
Cites
Financial intermediation and delegated monitoring
Diamond, D. W. (1984) · The Review of Economic Studies · doi:10.2307/2297430 · Cited by 8,476
Financing Constraints and Corporate Investment
Fazzari, S. M., Hubbard, R. G., Petersen, B. C., Blinder, A. S., & Poterba, J. M. (1988) · Brookings Papers on Economic Activity · doi:10.2307/2534426 · Cited by 5,574
Kiyotaki, N., & Moore, J. (1997) · Journal of Political Economy · doi:10.1086/262072 · Cited by 4,694
The Financial Accelerator in a Quantitative Business Cycle Framework
Bernanke, B., Gertler, M., & Gilchrist, S. (1998) · National Bureau of Economic Research · doi:10.3386/w6455 · Cited by 4,592
Agency Costs, Net Worth, And Business Fluctuations
Bernanke, B., Gertler, M., Bernanke, B., & Gertler, M. (1988) · Unknown · doi:10.22004/ag.econ.292693 · Cited by 4,386
Financing Constraints and Corporate Investment
Fazzari, S., Hubbard, R. G., & Petersen, B. (1987) · National Bureau of Economic Research · doi:10.3386/w2387 · Cited by 4,351
Financial Intermediation, Loanable Funds, and The Real Sector
Holmstrom, B., & Tirole, J. (1997) · The Quarterly Journal of Economics · doi:10.1162/003355397555316 · Cited by 3,889
A Model of Balance-of-Payments Crises
Krugman, P. (1979) · Journal of Money, Credit and Banking · doi:10.2307/1991793 · Cited by 2,904
Domestic Saving and International Capital Flows
Feldstein, M., & Horioka, C. (1980) · The Economic Journal · doi:10.2307/2231790 · Cited by 2,765
Capital-Market Imperfections and Investment
Hubbard, R. G. (1997) · National Bureau of Economic Research · doi:10.3386/w5996 · Cited by 2,545
Cited by
Thresholds in the process of international financial integration
Ayhan Kose, M., Prasad, E. S., & Taylor, A. D. (2011) · Journal of International Money and Finance · doi:10.1016/j.jimonfin.2010.08.005 · Cited by 325
Financial sector development and growth volatility: An international study
Xue, W.-J. (2020) · International Review of Economics & Finance · doi:10.1016/j.iref.2020.06.025 · Cited by 31
Metadata
- Authors
- Aghion, P., Bacchetta, P., & Banerjee, A.
- Venue
- Journal of Monetary Economics
- Publisher
- Elsevier BV
- Published
- 2004-09
- Volume
- 51
- Issue
- 6
- Pages
- 1077-1106
- ISSN
- 0304-3932 (ISSN-L)
- OpenAlex
- W2139320722
- Cited by
- 285
- References
- 30
- FWCI
- 23.80
- Type
- journal article
- Language
- en
- Open access
- bronze
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
Are you an author, or do you see a problem with this page? Request a review
How to cite
Cite CoChat for the checks on this page, and the paper for its own findings.
- This page
- CoChat. (2026). Citation check: Financial development and the instability of open economies. https://app.cochat.ai/papers/10.1016/j.jmoneco.2003.12.001
- The paper
- Aghion, P., Bacchetta, P., & Banerjee, A. (2004). Financial development and the instability of open economies. Journal of Monetary Economics. https://doi.org/10.1016/j.jmoneco.2003.12.001
Data sources
Bibliographic data: Semantic Scholar, OpenAlex, Crossref.
Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
