Finance and Balanced Growth

Alex Trew

No 2010-61, SIRE Discussion Papers from Scottish Institute for Research in Economics (SIRE)

Abstract: The Uzawa (1961) theorem applied to finance and growthsuggests that a long-run positive correlation between financial efficiency and depth is only present when variations in the extent of access to financial services are considered. Improvements in financial efficiency can lead to new capital augmenting technologies along the balanced path, but only improvements in financial efficiency directed towards labor can change the rate of growth in the long-run. These findings suggest ways to understand some of the more nuanced relationships between finance and growth observed in the data and point in a number of directions for future research.

Keywords: Finance and Growth; Endogenous Growth; Uzawa Theorem (search for similar items in EconPapers)
Date: 2010
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Journal Article: FINANCE AND BALANCED GROWTH (2014)
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