Economic Growth and Financial System
AbstractThis document provides empirical evidence about the role of the financial system on the growth of developing economies. In order to prove that relationship a panel data regression using a sample of 26 developing economies for the period 1961- 2005 is estimated. Instrumental variables methodology is used for econometric estimations. A positive relationship between financial development and economic growth was found. The estimates suggest that the financial system contributes to increase economic growth by improving investment allocation. Therefore, a properly functioning financial system is a necessary but not a sufficient condition to promote growth in developing economies.
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Bibliographic InfoArticle provided by Central Bank of Argentina, Economic Research Department in its journal Ensayos Económicos.
Volume (Year): 1 (2012)
Issue (Month): 65-66 (September)
economic development; economic growth; financial development; financial intermediation;
Find related papers by JEL classification:
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
- G2 - Financial Economics - - Financial Institutions and Services
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