Financial Development and Economic Growth. A Theoretical and Empirical Overview

Filomena Pietrovito ()
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Filomena Pietrovito: Università degli Studi del Molise

Rivista di Politica Economica, 2012, issue 3, 232-359

Abstract: This article presents a review of the literature on finance and growth. Theoretical contributions show that the existence of financial institutions, motivated by the reduction of risk aversion and asymmetric information between borrowers and lenders, allows a better resources allocation which, in turn, leads to capital accumulation and technological innovation. Empirical analyses, by adopting different techniques able to measure the functions performed by financial systems, meant to identify the channels through which financial development enhances economic growth, and to attenuate endogeneity biases, suggest that policy makers should take into account the role played by financial systems in sustaining growth

Keywords: financial intermediaries; financial markets; financial development; economic growth (search for similar items in EconPapers)
JEL-codes: G0 O0 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:rpo:ripoec:y:2012:i:3:p:323-359

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