What Does the Walrasian Auctioneer Know? (Or: The Relationship Between Technology Adoption and Financial Innovation.)
This paper proposes the view that financial development and economic growth are linked through the characteristics of technology. The most obvious connection between technology and financial innovation emerges through risk-sharing. Technology is modeled as a distribution over outcomes. Technological progress allows higher output realizations to occur and changes the risk-profile of those realizations. The decision to adopt a particular technology endogenously pins down the states of the world the economy will face. Technology adoption will depend on the ability of the financial sector to expand the set of risk-sharing contracts offered to economic agents in response to the changes in the set of states of the world arising from technological progress
|Date of creation:||11 Aug 2004|
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- Robert G. King & Ross Levine, 1993.
"Finance and Growth: Schumpeter Might Be Right,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 108(3), pages 717-737.
- Ross Levine, 1997.
"Financial Development and Economic Growth: Views and Agenda,"
Journal of Economic Literature,
American Economic Association, vol. 35(2), pages 688-726, June.
- Levine, Ross, 1996. "Financial development and economic growth : views and agenda," Policy Research Working Paper Series 1678, The World Bank.
- Levine, Ross & Zervos, Sara, 1998.
"Stock Markets, Banks, and Economic Growth,"
American Economic Review,
American Economic Association, vol. 88(3), pages 537-58, June.
- Levine, Ross & Zervos, Sara, 1996. "Stock markets, banks, and economic growth," Policy Research Working Paper Series 1690, The World Bank.
- Ross Levine & Sara Zervos, . "Stock markets, banks and economic growth ," CERF Discussion Paper Series 95-11, Economics and Finance Section, School of Social Sciences, Brunel University.
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