Does financial deepening matter in financial crisis? An empirical investigation of developed and emerging economies
International Islamic University, Islamabad, Pakistan
This study explores the impact of financial deepening on financial crises in United State of America and Pakistan. The study uses the annual data on financial crisis and financial deepening ranging from 1997 to 2016 in order to encapsulate financial crisis in emerging and developed economies. Study applies Patel and Sarkar (1998) approach to identify and assess accurate form of financial crises. The findings suggest a positive relationship between financial deepening and financial crises in the case of USA, however, no such relationship could be established in case of Pakistan.
Keywords: Financial deepening, financial crises, Pakistani stock index, US stock index.