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Finance and Growth: A Critical Survey

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  • Alex Trew

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Abstract

We present a survey of the finance-growth nexus that raises a number of qualifications to the mainstream interpretation. Doubts regarding empirical consensus are investigated and we consider the prevalence of cross-section econometrics as dominant in shaping the present theoretical consensus. To facilitate a quantitative understanding of the theoretical literature we develop a model capable of capturing a number of key conclusions from theoretical research. The core implications of many finance and growth theories are shown to be disconnected not only from their modern empirical counterparts, but also from the historical literature.

Suggested Citation

  • Alex Trew, 2005. "Finance and Growth: A Critical Survey," CDMA Working Paper Series 200507, Centre for Dynamic Macroeconomic Analysis, revised 15 Apr 2006.
  • Handle: RePEc:san:cdmawp:0507
    as

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    File URL: http://www.st-andrews.ac.uk/~wwwecon/CDMA/papers/wp0507.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    finance and growth; endogenous growth; economic history.;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913

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