Growth and Inequality Effects of Decades of Financial Transformation in OECD Countries

Boris Cournède and Catherine L. Mann
Additional contact information
Catherine L. Mann: ECO/PED, OECD Economics Department

Comparative Economic Studies, 2018, vol. 60, issue 1, No 2, 3-14

Abstract: Abstract Finance has massively expanded and deeply changed across OECD countries over the past 50 years. Rapid growth of finance has been accompanied by a debt shift away from business towards household credit and, after 2000, a withering of equity capital. Econometric investigations indicate that these changes have contributed to slowing down potential growth. In OECD countries, higher credit/GDP ratios imply slower trend growth, especially when lending goes to households; by contrast, additional stockmarket funding boosts growth. Moreover, these trends have contributed to widening inequalities. There is a case for policymakers to focus on macro-prudential policy tools that optimise growth-stability trade-offs.

Keywords: Finance; Growth; Inequality; Credit; Equity (search for similar items in EconPapers)
JEL-codes: D14 D63 G1 G2 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1057/s41294-017-0046-0 Abstract (text/html)
Access to full text is restricted to subscribers.

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:pal:compes:v:60:y:2018:i:1:d:10.1057_s41294-017-0046-0

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41294/PS2

DOI: 10.1057/s41294-017-0046-0

Access Statistics for this article

Comparative Economic Studies is currently edited by Nauro Campos

More articles in Comparative Economic Studies from Palgrave Macmillan, Association for Comparative Economic Studies Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().