Financial intermediation and growth: Causality and causes

Financial intermediation and growth: Causality and causes

This paper evaluates (1) whether the exogenous component of "nancial intermediary development in#uences economic growth and (2) whether cross-country di!erences in legal and accounting systems (e.g., creditor rights, contract enforcement, and accounting standards) explain di!erences in the level of "nancial development. Using both traditional cross-section, instrumental variable procedures and ...

Inflation, Growth, and Financial Intermediation

T he key role of government policies in the process of development has long been recognized. The recent availability of quality data has led to quantitative analyses of the effect such policies have on development. Most of the renewed research effort on this front, both theoretical and empirical, has emphasized the relationship between fiscal policy and the paths of development of countries. 1 ...

Financial Intermediation, the Environment, and Economic Growth

Commentary on " Inflation, Growth, and Financial Intermediation"

This article begins by asking whether standard endogenous growth models with money, when calibrated to properties of U.S. data, are consistent with the quantitative relationship between inflation and growth documented in the empirical growth literature. V. V. Chari, Larry E. Jones, and Rodolfo E. Manuelli summarize this literature as finding that a 10 percent increase in the rate of inflation i...

Financial Intermediation

The savings/investment process in capitalist economies is organized around financial intermediation, making them a central institution of economic growth. Financial intermediaries are firms that borrow from consumer/savers and lend to companies that need resources for investment. In contrast, in capital markets investors contract directly with firms, creating marketable securities. The prices o...