The Financial Model for Albania: A panel data approach

The recent financial crisis has highlighted the important role of the financial system in the overall economic performance and the individual sectors of the economy. The importance of the financial channels has been argued even before the onset of the crisis, by Bernanke et al., (1999) who have considered them both as amplifiers and sources of business-cycle fluctuations. On the other hand, other authors, such as Meier and Mueller (2006), find that these channels are more important in times of deep financial stress than in normal times. This discussion has become crucial during the latest decade, which has experienced a fast growth of the financial markets and especially of the banking sector in the emerging economies.