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Reassessing the impact of finance on growth

Stephen Cecchetti () and Enisse Kharroubi

No 381, BIS Working Papers from Bank for International Settlements

Abstract: This paper investigates how financial development affects aggregate productivity growth. Based on a sample of developed and emerging economies, we first show that the level of financial development is good only up to a point, after which it becomes a drag on growth. Second, focusing on advanced economies, we show that a fast-growing financial sector is detrimental to aggregate productivity growth.

Keywords: Growth; financial development; credit booms; R&D intensity; financial dependence (search for similar items in EconPapers)
Pages: 22 pages
Date: 2012-07
New Economics Papers: this item is included in nep-ban, nep-eff, nep-fdg and nep-mfd
References: View references in EconPapers View complete reference list from CitEc
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