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Mr. Noriaki Kinoshita and Mr. Cameron McLoughlin
The degree of an economy’s monetization, which has an important implication on economic growth, can be affected by the conduct of monetary policy, financial sector reform, and episodes of financial crises. The paper finds that monetization--measured by the ratio of broad money to nominal GDP-- in low- to middle-income countries is significantly correlated with per-capita GDP, real interest rates, and financial sector reform. It suggests that maintaining an upward momentum in monetization can be an important policy objective, particularly for low-income countries, and that monetary and financial sector policies need to be conducive to enhancing monetization.
Mr. Noriaki Kinoshita and Mr. Cameron McLoughlin

-income countries. Despite the heterogeneity of the country experiences regarding monetization, it has been found that several fundamental factors, including per-capita income, real bank deposit rates, and financial sector reforms, are associated with long-run monetization outcomes. Monetization can be an important policy objective because it is a key element of financial sector development which can be a powerful driving force of sustaining and accelerating economic growth. Future research could examine in greater details which types of financial sector reforms are associated