Two Centuries of Finance and Growth in the United States, 1790-1980

Howard Bodenhorn

No 22652, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Do efficient financial markets and institutions promote economic growth? Have they done so in the past? In this essay, to be included in the Handbook of Finance and Development (edited by Thorsten Beck and Ross Levine), I survey a large and diverse historical literature that explores the connection between finance and growth in US history. The US financial system was important in mobilizing savings, allocating capital, exerting corporate control, and mitigating borrower opportunism. US finance was characterized by a wide variety of intermediaries – commercial banks, savings banks, building and loan associations, mortgage companies, investment banks and securities markets – that emerged to fill specific financial niches, compete with and complement the activities of existing intermediaries. The weight of the evidence is consistent with the interpretation that finance facilitated and encouraged growth. Despite the breadth and diversity of approaches, there remain many potentially fruitful lines of further inquiry.

JEL-codes: G2 N2 (search for similar items in EconPapers)
Date: 2016-09
New Economics Papers: this item is included in nep-fdg, nep-gro and nep-his
Note: DAE
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Citations: View citations in EconPapers (11)

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Working Paper: Two Centuries of Finance and Growth in the United States, 1790-1980 (2016)
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