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Wealth, Financial Intermediation and Growth

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Author Info
Alejandro Gaytán González
Romain Ranciere

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Abstract

This paper presents empirical support for the existence of wealth effects in the contribution of financial intermediation to economic growth, and offers a theoretical explanation for these effects. Using GMM dynamic panel data techniques applied to study the growth-promoting effects of financial intermediation, we show that the exogenous contribution of financial development to economic growth has different effects for different levels of income per capita. We find that this contribution is generally increasing with the level of income per capita of the economy, up to a relatively high level of income.

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File URL: http://www.banxico.org.mx/documents/%7BF80736D2-B5A8-A729-1813-B4389823ED18%7D.pdf
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Paper provided by Banco de México in its series Working Papers with number 2005-02.

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Date of creation: Jun 2005
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Handle: RePEc:bdm:wpaper:2005-02

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Related research
Keywords: Growth models; Liquidity; Financial intermediation; Financial fragility; Banking crises;

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Find related papers by JEL classification:
E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages
O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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  24. repec:pal:imfstp:v:45:y:1998:i:1:p:3 is not listed on IDEAS
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Alejandro Gaytan & Romain Ranciere, 2005. "Banks, Liquidity Crises and Economic Growth," DEGIT Conference Papers c010_040, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
    Other versions:
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