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Money and economic development: A long‐run perspective

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  • Morten Sølvsten Schaiffel‐Nielsen

Abstract

This article explores the association between money and long‐run economic growth in a panel of 27 countries over 200 years. It presents evidence of a complementarity between freedom and decentralisation of the monetary system in terms of their contribution to growth in GDP per capita. The significant and positive association between freedom and economic growth is found to be significantly stronger in a decentralised (market‐based) than in a centralised (government‐controlled) monetary system. For the average level of freedom across the 27 countries today, shifting from a centralised to a decentralised monetary system is predicted to almost double growth rates.

Suggested Citation

  • Morten Sølvsten Schaiffel‐Nielsen, 2020. "Money and economic development: A long‐run perspective," Economic Affairs, Wiley Blackwell, vol. 40(2), pages 220-236, June.
    • Handle: RePEc:bla:ecaffa:v:40:y:2020:i:2:p:220-236
    DOI: 10.1111/ecaf.12408
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