 Financial development and growthZsolt Becsi () and Ping Wang Economic Review, 1997, vol. 82, issue Q 4, 46-62 Abstract: Poor performance by the financial sector can be costly for society. On the other hand, a healthy banking sector has been thought by some to contribute to the growth of the economy. Recently, though, economists have begun to analyze new elements of the linkages between the financial and real sides of the economy. ; This article provides an illustrative model that is meant to capture current thinking about the ways in which financial intermediaries affect growth. The model shows how households, firms, and financial intermediaries interact to determine equilibrium growth rates and various interest rates and rate spreads. It is also used to discuss the effects of repressive financial policies such as reserve requirements, interest rate controls, and entry limitations such as barriers to interstate banking. ; The authors survey recent empirical literature on growth and financial intermediation, which has shown that different measures of financial development are positively correlated with economic growth rates. They conclude that although there have been some attempts to quantify the effect of financial repression, attempting precise policy recommendations would be premature. Keywords: Banking structure; Financial institutions; Financial services industry (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:fip:fedaer:y:1997:i:q4:p:46-62:n:v.82no.4 Ordering information: This journal article can be ordered from Access Statistics for this article More articles in Economic Review from Federal Reserve Bank of Atlanta Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.