文档介绍：1 Introduction
The period beginning in the mid 1980s and ending in the late 2000s has been characterized by a fall in output volatility across industrialized nations, a phenomenon which has been frequently referred to as ‘the great moderation’. While this period of relative tranquility and economic prosperity was followed by the present crisis, it is nevertheless a matter of debate whether the phenomenon of great moderation can be explained by economic factors or pure luck. Several factors have been adduced to explain this phenomenon, ranging from better macroeconomic policies to structural changes in inventory management (Summers 2005). While several empirical papers have tried to identify the main driver of the great moderation, most of the studies have been limited to the context of the US. However there is evidence to suggest that Europe had also experienced declining macroeconomic volatility during the above mentioned period (Summers 2005; Kent et al. 2005; Barrell and Davis 2005).
Empirical studies suggest that financial integration (Gavin and Hausmann 1996) and financial development (Easterly et al. 2001; Denizer et al. 2002) can help engender macroeconomic stability. However, as the debate over bank versus market-based financial systems has shown, the different segments of the financial system can have different implications for the macro-economy (Levine 2002). As fir