Stock Market Liquidity and Economic Growth: Theory and Evidence

Ross Levine ()

Chapter 1 in Finance, Research, Education and Growth, 2003, pp 3-24 from Palgrave Macmillan

Abstract: Abstract Consider the following three statements. Liquid stock markets were a pre-condition for the Industrial Revolution and a critical factor underlying long-run growth in many countries. Enhanced stock market liquidity reduces saving rates and weakens corporate control, which retard economic growth. Stock markets are basically a sideshow, a casino where players come to place bets, but where there is little feedback to the real economy. Rigorous theoretical models support each of these statements.1

Keywords: Gross Domestic Product; Stock Market; Saving Rate; Corporate Control; Liquidity Risk (search for similar items in EconPapers)
Date: 2003
References: Add references at CitEc
Citations: View citations in EconPapers (6)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:palchp:978-1-4039-2023-2_1

Ordering information: This item can be ordered from
http://www.palgrave.com/9781403920232

DOI: 10.1057/9781403920232_1

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().