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Economic Growth and Financial Depth: Is the Relationship Extinct Already?

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  • Peter L. Rousseau
  • Paul Wachtel

Abstract

Although the finance-growth nexus has become firmly entrenched in the empirical literature, studies that question the strength of the empirical results have appeared and seem to have become more frequent as well. In this paper we re-examine the core country panel results that established the relationship between financial depth and growth rates. We examine the sensitivity of the core result to changes in time period and variation in the sample of countries included.

Suggested Citation

  • Peter L. Rousseau & Paul Wachtel, 2005. "Economic Growth and Financial Depth: Is the Relationship Extinct Already?," WIDER Working Paper Series DP2005-10, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:dp2005-10
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    References listed on IDEAS

    as
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    6. Levine, Ross, 2005. "Finance and Growth: Theory and Evidence," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 12, pages 865-934, Elsevier.
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    More about this item

    Keywords

    Econometric models (Economic development); Finance infrastructure; Macroeconomics;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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