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Finance and Growth: A Critical Survey

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  • Alex Trew

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Abstract

We present a survey of the finance-growth nexus that raises a number of qualifications to the mainstream interpretation. Doubts regarding empirical consensus are investigated and we consider the prevalence of cross-section econometrics as dominant in shaping the present theoretical consensus. To facilitate a quantitative understanding of the theoretical literature we develop a model capable of capturing a number of key conclusions from theoretical research. The core implications of many finance and growth theories are shown to be disconnected not only from their modern empirical counterparts, but also from the historical literature.

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File URL: http://www.st-andrews.ac.uk/economics/CDMA/papers/wp0507.pdf
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Bibliographic Info

Paper provided by Centre for Dynamic Macroeconomic Analysis in its series CDMA Working Paper Series with number 200507.

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Date of creation: 15 Jul 2005
Date of revision: 15 Apr 2006
Handle: RePEc:san:cdmawp:0507

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Postal: School of Economics and Finance, University of St. Andrews, Fife KY16 9AL
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Fax: 01334 462444
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Web page: http://www.st-andrews.ac.uk/cdma
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Keywords: finance and growth; endogenous growth; economic history.;

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  1. Thorsten Beck & Ross Levine, 2003. "Legal institutions and financial development," Policy Research Working Paper Series 3136, The World Bank.
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  30. repec:cup:macdyn:v:7:y:2003:i:3:p:363-93 is not listed on IDEAS
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Citations

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Cited by:
  1. Marianna Succurro, 2008. "Bankruptcy Systems And Economic Performance Across Contries: Some Empirical Evidence," Working Papers 200801, Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica).
  2. Agustín Filippo, 2010. "Imperfectly Substitutable Financial Instruments in an Economic Development Model," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(57-58), pages 59-93, January -.
  3. Trew, Alex, 2008. "Efficiency, depth and growth: Quantitative implications of finance and growth theory," Journal of Macroeconomics, Elsevier, vol. 30(4), pages 1550-1568, December.
  4. Kiril Danailov Kossev, 2008. "The Banking Sector and the Great Depression in Bulgaria, 1924 - 1938: Interlocking and Financial Sector Profitability," Working Papers 76, Bank of Greece.
  5. Max Gillman & Michal Kejak, 2007. " Inflation, Financial Development and Human Capital-Based Endogenous Growth: an Explanation of Ten Empirical Findings," CDMA Conference Paper Series 0703, Centre for Dynamic Macroeconomic Analysis.
  6. Garofalo, Giuseppe & Morganti, Patrizio, 2010. "Il finanziamento degli investimenti in R&S. Gli effetti sulla crescita e sulla struttura finanziaria," MPRA Paper 23551, University Library of Munich, Germany.
  7. David Hauner, 2006. "Fiscal Policy and Financial Development," IMF Working Papers 06/26, International Monetary Fund.
  8. Alex Trew, 2007. "Endogenous Financial Development and Industrial Takeoff," CDMA Working Paper Series 200702, Centre for Dynamic Macroeconomic Analysis.
  9. Fiaschi, Alessandro, 2008. "A note about credit rationing on research and development," MPRA Paper 12300, University Library of Munich, Germany, revised 10 Dec 2008.
  10. Kar, Muhsin & NazlIoglu, Saban & AgIr, Hüseyin, 2011. "Financial development and economic growth nexus in the MENA countries: Bootstrap panel granger causality analysis," Economic Modelling, Elsevier, vol. 28(1-2), pages 685-693, January.
  11. Marianna Succurro, 2012. "Bankruptcy systems and economic performance across countries: some empirical evidence," European Journal of Law and Economics, Springer, vol. 33(1), pages 101-126, February.

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