摘要：Considering the contradicting findings and inadequate theoretical framework, this paper re-investigates the relationship
between financial development and monetary policy effectiveness utilizing panel data from 40 economies, covering the
time-span 1992-2014.This research shows that the influence of monetary policy in conjunction with financial
development on output growth and inflation tends to be positive and negative, respectively, although quite meager in
magnitude, where the System GMM for the combined data set is thought to be the more appropriate estimation
technique as it addresses the endogeneity problem. It implies that financial development enhances monetary policy
effectiveness. As monetary expansion, combined with financial development can cause sustainable growth, so,
financial development is instrumental in policy effectiveness and consequently, must be considered meticulously for
appropriate monetary policy formulation. Expansionary monetary policy could be more effective in the developed
economies for output expansion and influence inflation more in the developing world.
