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International Evidence on the Financial Kuznets Curve

Author

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  • Moosa, Imad

    (School of Economics, Finance and Marketing RMIT, Melbourne, Australia)

Abstract

The results presented in this study provide cross-sectional evidence on the “financial Kuznets curve”, which is the financial counterpart of the environmental Kuznets curve. It is a representation of the “finance curse”, providing a warning signal against over-dependence on the financial sector. By measuring the degree of financialisation in terms of the ratio of publicly-traded shares to GDP, the results show an inverted U-shaped curve between the GDP growth rate and financialisation. The negative effect of financialisation on growth materialises much more quickly in high growth countries. Evidenze internazionali sulla curva della finanza di Kuznets Questo studio presenta evidenze cross-section sulla “curva della finanza di Kuznets”, che è l’equivalente in ambito finanziario della curva ambientale di Kuznets. Essa è la rappresentazione della “maledizione finanziaria” e fornisce segnali di allarme sull’eccessiva dipendenza dal settore della finanza. Misurando il grado di “finanziarizzazione” in termini di rapporto quotazioni borsisitiche/PIL, i risultati mostrano una curva ad U inversa tra il tasso di crescita del PIL e la “finanziarizzazione”. L’effetto negativo di quest’ultima sulla crescita si materializza molto più velocemente nei paesi con tassi di crescita elevati.

Suggested Citation

  • Moosa, Imad, 2016. "International Evidence on the Financial Kuznets Curve," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 69(4), pages 365-378.
    • Handle: RePEc:ris:ecoint:0785
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    References listed on IDEAS

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    Cited by:

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    2. Nawaz, Kishwar & Lahiani, Amine & Roubaud, David, 2019. "Natural resources as blessings and finance-growth nexus: A bootstrap ARDL approach in an emerging economy," Resources Policy, Elsevier, vol. 60(C), pages 277-287.
    3. Jan Libich & Liam Lenten, 2022. "Hero or villain? The financial system in the 21st century," Journal of Economic Surveys, Wiley Blackwell, vol. 36(1), pages 3-40, February.

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    More about this item

    Keywords

    Environmental Kuznets Curve; Financial Kuznets Curve; Finance Curse; Financialisation;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • G01 - Financial Economics - - General - - - Financial Crises

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