EconPapers    
Economics at your fingertips  
 

The finance–growth nexus in crisis

Max Breitenlechner, Martin Gächter () and Friedrich Sindermann ()

Economics Letters, 2015, vol. 132, issue C, 31-33

Abstract: While the literature on the finance–growth nexus suggests a positive link between financial development and economic growth, another strand of literature highlights the crucial role of credit growth for the occurrence and strength of financial and economic crises. In this paper, we link the two seemingly contradicting strands of the literature by a strong and robust empirical finding: While financial development is indeed positively linked to GDP p.c. growth in normal, non-crisis times, larger financial sectors lead to significantly worse economic outcomes in the case of a banking crisis.

Keywords: Finance; Financial development; Growth; Banking crisis; Non-linearities (search for similar items in EconPapers)
JEL-codes: E44 G10 O40 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176515001652
Full text for ScienceDirect subscribers only

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:eee:ecolet:v:132:y:2015:i:c:p:31-33

DOI: 10.1016/j.econlet.2015.04.014

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2020-03-29
Handle: RePEc:eee:ecolet:v:132:y:2015:i:c:p:31-33