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Finance: Economic Lifeblood or Toxin?

In: The Social Value of the Financial Sector Too Big to Fail or Just Too Big?

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  • Marco Pagano

    (University of Naples Federico II, Italy and EIEF,Italy and CSEF, Italy)

Abstract

The following sections are included:IntroductionA Mixed Record: The LiteratureThe Bright SideThe Dark SideShadow banks and securitizationLow Interest Rates and the Fall in Credit StandardsThe Nonlinear Effect of Financial Development: Some EvidenceNonlinear Effect on Long-Run GrowthNonlinear Effects on Bank Solvency and Systemic StabilityWhy Didn’t Regulation Prevent Financial Hypertrophy?“Sins of Omission:” Neglecting Financial Innovation and Changing Incentives“Sins of Commission:” The Role of PoliticsReferences

Suggested Citation

  • Marco Pagano, 2013. "Finance: Economic Lifeblood or Toxin?," World Scientific Book Chapters, in: Viral V Acharya & Thorsten Beck & Douglas D Evanoff & George G Kaufman & Richard Portes (ed.), The Social Value of the Financial Sector Too Big to Fail or Just Too Big?, chapter 8, pages 109-146, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789814520294_0008
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    Cited by:

    1. Michael A Stemmer, 2017. "Revisiting Finance and Growth in Transition Economies - A Panel Causality Approach," Post-Print halshs-01524462, HAL.
    2. Kristle Romero Cortes, 2014. "Rebuilding after Disaster Strikes: How Local Lenders Aid in the Recovery," Working Papers (Old Series) 1428, Federal Reserve Bank of Cleveland.
    3. Amaia Altuzarra & Patricia Peinado & Carlos Rodriguez & Felipe Serrano, 2016. "Changes in the relationship between the financial and the real sector and the present financial crisis in the European Union," Working papers wpaper159, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    4. Maimbo, Samuel Munzele & Melecky, Martin, 2014. "Financial sector policy in practice : benchmarking financial sector strategies around the world," Policy Research Working Paper Series 6746, The World Bank.
    5. Georg Man, 2015. "Bank Competition, Economic Growth, and Nonlinearity: A Nonparametric Approach," Scottish Journal of Political Economy, Scottish Economic Society, vol. 62(3), pages 310-324, July.
    6. Emmanuel Carré & Guillaume L’Œillet, 2017. "Une revue de la littérature récente sur le nexus finance-croissance après la crise : apports, limites et pistes de recherche," Revue d'économie financière, Association d'économie financière, vol. 0(3), pages 271-290.
    7. Marco Pagano & ESRB Advisory Scientific Committee, 2014. "Is Europe Overbanked?," mBank - CASE Seminar Proceedings 132, CASE-Center for Social and Economic Research.
    8. Bahadir, Berrak & Valev, Neven, 2017. "Catching up or drifting apart: Convergence of household and business credit in Europe," International Review of Economics & Finance, Elsevier, vol. 47(C), pages 101-114.
    9. Enrico Berkes & Ugo Panizza & Jean Louis Arcand, 2015. "Too Much Finance or Statistical Illusion: A Comment," IHEID Working Papers 12-2015, Economics Section, The Graduate Institute of International Studies.
    10. Ugo Panizza, 2013. "Guest Workers: Financial Development and Economic Growth: Known Knowns, Known Unknowns, and Unknown Unknowns," IHEID Working Papers 13-2013, Economics Section, The Graduate Institute of International Studies.
    11. Samba Mbaye & Ms. Marialuz Moreno Badia & Kyungla Chae, 2018. "Bailing Out the People? When Private Debt Becomes Public," IMF Working Papers 2018/141, International Monetary Fund.
    12. Emmanuel Carré & Guillaume L’œillet, 2018. "The Literature on the Finance–Growth Nexus in the Aftermath of the Financial Crisis: A Review," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 60(1), pages 161-180, March.
    13. Ugo Panizza, 2018. "Nonlinearities in the Relationship Between Finance and Growth," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 60(1), pages 44-53, March.
    14. Claessens, Stijn, 2017. "Regulation and structural change in financial systems," CEPR Discussion Papers 11822, C.E.P.R. Discussion Papers.
    15. Guangdong Xu & Binwei Gui, 2021. "The non‐linearity between finance and economic growth: a literature review and evidence from China," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 35(1), pages 3-18, May.
    16. Massimo Coletta & Riccardo De Bonis & Stefano Piermattei, 2019. "Household Debt in OECD Countries: The Role of Supply-Side and Demand-Side Factors," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 143(3), pages 1185-1217, June.
    17. Jean Arcand & Enrico Berkes & Ugo Panizza, 2015. "Too much finance?," Journal of Economic Growth, Springer, vol. 20(2), pages 105-148, June.
    18. Gould, David M. & Melecky, Martin & Panterov, Georgi, 2016. "Finance, growth and shared prosperity: Beyond credit deepening," Journal of Policy Modeling, Elsevier, vol. 38(4), pages 737-758.
    19. Richard E. Itaman, 2022. "The finance‐growth nexus enigma: Bringing in institutional context and the productiveness debate," Journal of Economic Surveys, Wiley Blackwell, vol. 36(2), pages 504-527, April.

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    More about this item

    Keywords

    Depository Institutions; Banks; Too-Big-to-Fail; Financial Innovations;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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