The objective of this lecture is to jointly explore the links between financial reforms -- regarding both the domestic financial system and the regulation of capital flows -- economic growth, volatility, and the risk of financial crises. The lecture will build up on the considerable work documenting financial reforms across countries. It will propose alternative theoretical and empirical frameworks through which the effects of financial reforms on growth and crisis risk can be analyzed. The first part of the lecture will be dedicated to a selective review the literature in order to identify key open questions. Thereafter, participants will use actual data and simple codes for stylized model to practically discuss and address some of these questions. An objective of the lecture is to go beyond the standard cross-country regression approach, and use insight from the theory as well as more disaggregated data, to more precisely understand the channels involved.

Romain Ranciere
Paris School of Economics, CEPR, FMI