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Financial Development, Growth, And The Distribution Of Income

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  • GREENWOOD, J.
  • JOVANOVIC, B.

Abstract

A paradigm is presented in which both the extent of financial intermediation and the rate of economic growth are endogenously determined. Financial intermediation promotes growth because it allows a higher rate of return to be earned on capital, and growth in turn provides the means to implement costly financial structures. This financial intermediation and economic growth are inextricably linked in accord with the Goldsmith-McKinnon-Shaw view on economic development. The model also generates a development cycle reminiscent of the Kuznets hypotheses. In particular, in the transition from a primitive slow-growing economy to a developed fast-growing one, a nation passes through a stage in which the distribution of wealth across the rich and poor widens. Copyright 1990 by University of Chicago Press.
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(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

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  • Greenwood, J. & Jovanovic, B., 1990. "Financial Development, Growth, And The Distribution Of Income," University of Western Ontario, The Centre for the Study of International Economic Relations Working Papers 9002, University of Western Ontario, The Centre for the Study of International Economic Relations.
    • Handle: RePEc:uwo:wocier:9002
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    References listed on IDEAS

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