This paper addresses the question of the necessity to find a causal relationship between financial development and growth and whether this relationship means anything at the macro level. Over the last 50 years the debate about this relationship has swung from an initial consensus that financial development follows, or is at least inter-related with growth, to an almost equally consensual belief that sustained economic growth follows from financial development. This paper argues that the relationship between financial development and economic growth is too complex to allow for such generalized assertions and that the evidence brought out in contemporary and historical research to support the newWashington-led consensus is seriously flawed. New research directions need to establish which financial policies work, especially at micro-level, and when, and to re-focus on the issue of production and the role finance can play in supporting productive investment.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. 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.
Publisher Info
Paper provided by Centre for Economic Research, Keele University in its series Keele Economics Research Papers with number
KERP 2003/07.
Length: 30 pages Date of creation: Nov 2003 Date of revision: Publication status: Forthcoming in Journal of International Development, 2006 Handle: RePEc:kee:kerpuk:2003/07
Note: The work presented here derives from research into the effects of financial policy on household behaviour, funded by the United Kingdom’s Department for International Development (DFID), Social Science Research, under contract R7968. The views presented here are those of the author and not of DFID. This is a revised version of a paper presented to the DSA Economics, Finance and Development Study Group Conference on 50 years of Development Economics in July 2003. Contact details of provider: Postal: Department of Economics, University of Keele, Keele, Staffordshire, ST5 5BG - United Kingdom Phone: +44 (0)1782 584581 Fax: +44 (0)1782 717577 Email: Web page: http://www.keele.ac.uk/depts/ec/cer/ More information through EDIRC
Order Information: Postal: Centre for Economic Research, Research Institute for Public Policy and Management, Keele University, Staffordshire ST5 5BG - United Kingdom Email: Web: http://www.keele.ac.uk/depts/ec/cer/pubs_kerps.htm
For technical questions regarding this item, or to correct its listing, contact: (Martin E. Diedrich).
References listed on IDEAS 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.:
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.)