The study looked at how financial growth affects output volatility in 79 countries from 1961 to 2012. They found that financial expansion helps reduce output volatility, with financial stability playing a key role. However, the impact of financial growth on output volatility varies. The study also explored how financial developments can influence output volatility through different channels, such as monetary and real sector volatility. Overall, the research suggests that financial development can increase monetary sector volatility but may reduce real sector volatility.