On the real effects of financial development
AbstractWe study a simple mode of financial and economic development based on consumption of real resources by the financial sector and constant returns to scale in accumulation of physical capital in the production secto. Transition from financial intermediation and firm-production is associated with a process of reallocation of resources towards more productive investiments and financial services. We find that the immediate growth impact of financial development is ambiguous - transition might lead to a periode of output decline. Redistibution policies which do not alter the timing of the transition imposed by the market forces could be not enough to offset the possible negative-growth effects associated with the transition process, and to prevent povertry traps possibly associated with premature emergence of financial intermediation.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia in its series Working Paper CRENoS with number 200010.
Date of creation: 2000
Date of revision:
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.:
- Jappelli, Tullio & Pagano, Marco, 1995.
"The Welfare Effects of Liquidity Constraints,"
CEPR Discussion Papers
1108, C.E.P.R. Discussion Papers.
- Jappelli, Tullio & Pagano, Marco, 1994.
"Saving, Growth, and Liquidity Constraints,"
The Quarterly Journal of Economics,
MIT Press, vol. 109(1), pages 83-109, February.
- Bencivenga, V.R. & Smith, B.D., 1988.
"Financial Intermediation And Endogenous Growth,"
RCER Working Papers
124, University of Rochester - Center for Economic Research (RCER).
- Arestis, Philip & Demetriades, Panicos O, 1997.
"Financial Development and Economic Growth: Assessing the Evidence,"
Royal Economic Society, vol. 107(442), pages 783-99, May.
- Panicos O. Demetriades & Philip Arestis, 1996. "Financial Development and Economic Growth: Assessing the Evidence," Keele Department of Economics Discussion Papers (1995-2001) 96/16, Department of Economics, Keele University.
- Acemoglu, Daron & Zilibotti, Fabrizio, 1996.
"Was Prometheus Unbound by Chance? Risk, Diversification and Growth,"
CEPR Discussion Papers
1426, C.E.P.R. Discussion Papers.
- Acemoglu, Daron & Zilibotti, Fabrizio, 1997. "Was Prometheus Unbound by Chance? Risk, Diversification, and Growth," Journal of Political Economy, University of Chicago Press, vol. 105(4), pages 709-51, August.
- Daron Acemoglu & Fabrizio Zilibotti, 1994. "Was Prometheus unbound by chance? Risk, diversification and growth," Economics Working Papers 98, Department of Economics and Business, Universitat Pompeu Fabra.
- anonymous, 1998. "Financial intermediation and growth," Economics Update, Federal Reserve Bank of Atlanta, issue Jan, pages 4.
- Diamond, Douglas W, 1984. "Financial Intermediation and Delegated Monitoring," Review of Economic Studies, Wiley Blackwell, vol. 51(3), pages 393-414, July.
- R. Naylor, 2001. "Industry profits and market size under bilateral oligopoly," Working Paper CRENoS 200108, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
- R. Naylor, 2001. "Firm profits and the number of firms under unionised oligopoly," Working Paper CRENoS 200109, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Antonello Pau).
If references are entirely missing, you can add them using this form.