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Keeping the momentum: how finance can continue to support growth in EMEs

In: Keeping the momentum: how finance can continue to support growth in EMEs

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  • Ryan Niladri Banerjee
  • Aaron Mehrotra
  • Fabrizio Zampolli

Abstract

This paper examines how finance can support economic growth in emerging market economies (EMEs). Historically, finance has contributed to rising income levels, yet its future impact is less certain. Evidence indicates that as credit and income levels increase, the positive impact of finance on growth tends to weaken. Additionally, unchecked credit expansion can lead to financial busts, resulting in prolonged periods of sub-par economic performance. At the same time, advances in digital technologies offer new opportunities for enhancing financial intermediation. Policy decisions will be key in three main areas: implementing structural reforms to improve market-based finance access; harnessing digital technologies to enhance financial efficiency and inclusion; and maintaining macro-financial stability to ensure sustainable growth.
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  • Ryan Niladri Banerjee & Aaron Mehrotra & Fabrizio Zampolli, 2024. "Keeping the momentum: how finance can continue to support growth in EMEs," BIS Papers chapters, in: Bank for International Settlements (ed.), Keeping the momentum: how finance can continue to support growth in EMEs, volume 127, pages 1-39, Bank for International Settlements.
    • Handle: RePEc:bis:bisbpc:148-01
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    1. Tomohiro Hirano & Joseph E. Stiglitz, 2025. "Credit, Land Speculation, and Low-Interest-Rate Policy," Papers 2503.23552, arXiv.org.
    2. Tomohiro Hirano & Joseph E. Stiglitz, 2025. "Growth and Fluctuations Economies with Land Speculation," NBER Working Papers 33589, National Bureau of Economic Research, Inc.

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