Finance and economic growth - a review of theory and the available evidence

Michael Thiel

No 158, European Economy - Economic Papers 2008 - 2015 from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: The EU's structural reform agenda attaches a considerable weight to the establishment of efficiently working and integrated EU financial markets. While there is a firm consensus that a well-functioning financial sector is a precondition for the efficient allocation of resources and the exploitation of an economy's growth potential, the economic literature is less consensual on how and to what extent finance affects economic growth. This paper reviews the economic theory and available evidence with particular focus on three questions: how does financial development affect economic growth; what are the features of a growth supportive financial structure; how are financial structures related to structural change and technical progress?Â

Keywords: financial development; economic growth; financial structures; structural change; technical progress (search for similar items in EconPapers)
Pages: 50 pages
Date: 2001-07
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Citations: View citations in EconPapers (40)

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Persistent link: https://EconPapers.repec.org/RePEc:euf:ecopap:0158

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