Tadesse, Solomon - William Davidson Institute, University of Michigan - 2006
instability, such as the level of inflation and external terms of trade, and cross-country differences in the
banking industry … use the average rate of inflation and the external terms
of trade. This is consistent with previous research (e.g., Barth … et al., 2004; Cull et al., 2005). Inflation
serves as a proxy for macroeconomic mismanagement that adversely affects the …