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Financial Development and Economic Growth: Experiences of Selected Developing Economies

  • Ahmed, Syed
  • Horner, James
  • Rafiq, Rafiqul Bhuyan
Registered author(s):

    The last two decades of the twentieth century witnessed a series of financial reforms in emerging economics of Asia, Africa and Latin America. The seminal works of R.I. McKinnon and E.S. Shaw, which attribute the slow growth of these economies to financial repression, inspired many of these reforms. The McKinnon-Shaw thesis demonstrates how government regulations cause low savings and investment, and ultimately engender financial repression. Financial liberalization, in this view, creates market-based incentives and promotes economic growth. The objectives of the paper are to (1) track financial development and critically review financial liberalization measures in the emerging economies of Brazil, Mexico, and Thailand, and (2) investigate statistically the relationship between financial development and economic growth of these economies.

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    File URL: http://purl.umn.edu/50014
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    Article provided by Review of Applied Economics in its journal Review of Applied Economics.

    Volume (Year): 4 (2008)
    Issue (Month): 1-2 ()
    Pages:

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    Handle: RePEc:ags:reapec:50014
    Contact details of provider: Web page: http://www.lincoln.ac.nz/story11874.html

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    1. Jaramillo, Fidel & Schiantarelli, Fabio & Weiss, Andrew, 1993. "Capital market imperfections before and after financial liberalization : a Euler Equation approach to panel data for Ecuadorian firms," Policy Research Working Paper Series 1091, The World Bank.
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    7. Stern, Nicholas, 1989. "The Economics of Development: A Survey," Economic Journal, Royal Economic Society, vol. 99(397), pages 597-685, September.
    8. Benhabib, Jess & Spiegel, Mark M, 2000. " The Role of Financial Development in Growth and Investment," Journal of Economic Growth, Springer, vol. 5(4), pages 341-60, December.
    9. Fabio Schiantarelli & Andrew Weiss & Fidel Jaramillo, 1993. "Capital Market Imperfections Before And After Financial Liberization: An Euler Equation Approach To Panel Data For Ecuadorian Firms," Boston College Working Papers in Economics 221, Boston College Department of Economics.
    10. E. Gelbard & Sérgio Pereira. Leite, 1999. "Measuring Financial Development in Sub-Saharan Africa," IMF Working Papers 99/105, International Monetary Fund.
    11. Eduardo Lora & Ugo Panizza & Myriam Quispe-Agnoli, 2004. "Reform fatigue: symptoms, reasons, and implications," Economic Review, Federal Reserve Bank of Atlanta, issue Q 2, pages 1 - 28.
    12. King, Robert G. & Levine, Ross, 1993. "Finance and growth : Schumpeter might be right," Policy Research Working Paper Series 1083, The World Bank.
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