EconPapers    
Economics at your fingertips  
 

A Theory of Growth, Financial Development and Trade

Keith Blackburn and Victor T. Y. Hung

Economica, 1998, vol. 65, issue 257, 107-124

Abstract: This paper presents an analysis of the joint determination of real and financial development. Privately informed designers obtain external finance for their research projects through incentive‐compatible loan contracts. Contracts are enforced through costly monitoring activity which lenders may either undertake themselves, or delegate to a financial intermediary. The analysis establishes a positive, two‐way causal relationship between growth and financial development. In addition, using a multi‐country version of the model, it is shown how both financial and trade liberalization can accelerate the development of intermediation; only trade liberalization has a direct positive effect on growth, however.

Date: 1998
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://doi.org/10.1111/1468-0335.00116

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:econom:v:65:y:1998:i:257:p:107-124

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0013-0427

Access Statistics for this article

Economica is currently edited by Frank Cowell, Tore Ellingsen and Alan Manning

More articles in Economica from London School of Economics and Political Science Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2025-03-19
Handle: RePEc:bla:econom:v:65:y:1998:i:257:p:107-124