Download or read book An Empirical Reassessment of the Relationship Between Finance and Growth written by Mr.Giovanni Favara and published by International Monetary Fund. This book was released on 2003-06-01 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reexamines the empirical relationship between financial development and economic growth. It presents evidence based on cross-section and panel data using an updated dataset, a variety of econometric methods, and two standard measures of financial development: the level of liquid liabilities of the banking system and the amount of credit issued to the private sector by banks and other financial institutions. The paper identifies two sets of findings. First, in contrast with the recent evidence of Levine, Loayza, and Beck (2001), cross-section and panel-data-instrumental-variables regressions reveal that the relationship between financial development and economic growth is, at best, weak. Second, there is evidence of nonlinearities in the data, suggesting that finance matters for growth only at intermediate levels of financial development. Moreover, using a procedure appropriately designed to estimate long-run relationships in a panel with heterogeneous slope coefficients, there is no clear indication that finance spurs economic growth. Instead, for some specifications, the relationship is, puzzlingly, negative.

Download or read book Financial Development and Economic Growth written by Mr.Pablo Emilio Guidotti and published by International Monetary Fund. This book was released on 1992-12-01 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the empirical relationship between long–run growth and the degree of financial development, proxied by the ratio of bank credit to the private sector as a fraction of GDP. We find that this proxy enters significantly and with a positive sign in growth regressions on a large cross–country sample, but with a negative sign using panel data for Latin America. Our findings suggest that the main channel of transmission from financial development to growth is the efficiency of investment, rather than its volume. We also present a model where the negative correlation between financial intermediation and growth results from financial liberalization in a poor regulatory environment.

Download or read book Machine Learning and Causality The Impact of Financial Crises on Growth written by Mr.Andrew J Tiffin and published by International Monetary Fund. This book was released on 2019-11-01 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: Machine learning tools are well known for their success in prediction. But prediction is not causation, and causal discovery is at the core of most questions concerning economic policy. Recently, however, the literature has focused more on issues of causality. This paper gently introduces some leading work in this area, using a concrete example—assessing the impact of a hypothetical banking crisis on a country’s growth. By enabling consideration of a rich set of potential nonlinearities, and by allowing individually-tailored policy assessments, machine learning can provide an invaluable complement to the skill set of economists within the Fund and beyond.

Download or read book Financial Development and Source of Growth written by Mr.Sami Ben Naceur and published by International Monetary Fund. This book was released on 2017-06-28 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines how financial development affects the sources of growth—productivity and investment—using a sample of 145 countries for the period 1960-2011. We employ a range of econometric approaches, focusing on the CCA and MENA countries. The analysis looks beyond financial depth to capture the access, efficiency, stability, and openness dimensions of financial development. Yet even in this broad interpretation, financial development does not appear to be a magic bullet for economic growth. We cannot confirm earlier findings of an unambiguously positive relationship between financial development, investment, and productivity. The relationship is more complex. The influence of the different dimensions of financial development on the sources of growth varies across income levels and regions.

Download or read book Economic Growth and Financial Development written by Muhammad Shahbaz and published by Springer Nature. This book was released on 2021-09-21 with total page 245 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book looks into the relationship between financial development, economic growth, and the possibility of a potential capital flight in the transmission process. It also examines the important role that financial institutions, financial markets, and country-level institutional factors play in economic growth and their impact on capital flight in emerging economies. By presenting new theoretical insights and empirical country studies as well as econometric approaches, the authors focus on the relationship between financial development and economic growth with capital flight in the era of financial crisis. Therefore, this book is a must-read for researchers, scholars, and policy-makers, interested in a better understanding of economic growth and financial development of emerging economies alike.

Download or read book The Direction of Causality Between Financial Development and Economic Growth written by Erdal Demirhan and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper we investigate the causality relationship between financial development and economic growth using available data from 1987:1 to 2006:04 about Turkey. We take total bank credit to private sector and total market capitalization as proxies for financial development and GDP as proxy for economic growth. In this context, Vector Error Correction Model and Impulse Response Functions (IRF) are used to explain possible casual relationships between variables. Empirical findings suggest that there is a bidirectional causality relationship between variables. While the development of the stock market and banking sector has caused economic growth, economic growth has also been brought about by stock market and banking sector developments in Turkey over the same period. Moreover, the contribution of the banking sector to economic growth has been larger than that of the stock market.

Download or read book Financial Structure and Economic Growth written by Aslı Demirgüç-Kunt and published by MIT Press. This book was released on 2001 with total page 452 pages. Available in PDF, EPUB and Kindle. Book excerpt: CD-ROM contains: World Bank data.

Download or read book Financial Development and Economic Growth written by Ross Levine and published by World Bank Publications. This book was released on with total page 84 pages. Available in PDF, EPUB and Kindle. Book excerpt: The International Monetary Fund (IMF) presents the full text of the December 2000 paper entitled "Financial Development and Economic Growth: An Overview," prepared by Mohsin S. Khan and Abdelhak S. Senhadji. The text is available in PDF format and the paper is part of the IMF's Working Paper series. This paper provides a review of literature on financial markets and discusses the relationship between financial development and economic growth.

Download or read book Finance Growth and Volatility written by Yan Xu and published by . This book was released on 2012 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: I study the time series relation between financial development, economic growth and growth volatility in one unified framework. Relying on a parsimonious panel VAR framework with a panel of 81 countries between 1962 and 2000, I find significant positive Granger causality from financial development to growth and negative Granger causality from financial development to volatility of growth. Financial development accounts for 2.6% of negative forecast error covariance between growth and growth volatility. These empirical regularities, however, are detected in emerging countries only and not in advanced economies. My findings are consistent with the idea that financial development is especially beneficial to countries at the early stage of industrialization. Further, country specific economic environment and structural factors, such as banking concentration degree, proportion of privately held banks, and legal environments, determine the likelihood of both Granger causality from financial development to growth and volatility, and the fraction of covariance between growth and volatility due to financial development.

Download or read book An Empirical Reassessment of the Relationship between Finance and Growth written by Giovanni Favara and published by . This book was released on 2006 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reexamines the empirical relationship between financial development and economic growth. It presents evidence based on cross-section and panel data using an updated dataset, a variety of econometric methods, and two standard measures of financial development: the level of liquid liabilities of the banking system and the amount of credit issued to the private sector by banks and other financial institutions. The paper identifies two sets of findings. First, in contrast with the recent evidence of Levine, Loayza, and Beck (2001), cross-section and panel-data-instrumental-variables regressions reveal that the relationship between financial development and economic growth is, at best, weak. Second, there is evidence of nonlinearities in the data, suggesting that finance matters for growth only at intermediate levels of financial development. Moreover, using a procedure appropriately designed to estimate long-run relationships in a panel with heterogeneous slope coefficients, there is no clear indication that finance spurs economic growth. Instead, for some specifications, the relationship is, puzzlingly, negative.

Download or read book Stock Markets Banks and Growth written by Thorsten Beck and published by World Bank Publications. This book was released on 2001 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: Analysis of a panel data set for 1976-98 shows that on balance stock markets and banks positively influence economic growth; findings that do not result from biases induced by simultaneity, omitted variables, or unobserved country-specific effects.

Download or read book Too Much Finance written by Mr.Jean-Louis Arcand and published by International Monetary Fund. This book was released on 2012-06-01 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines whether there is a threshold above which financial development no longer has a positive effect on economic growth. We use different empirical approaches to show that there can indeed be "too much" finance. In particular, our results suggest that finance starts having a negative effect on output growth when credit to the private sector reaches 100% of GDP. We show that our results are consistent with the "vanishing effect" of financial development and that they are not driven by output volatility, banking crises, low institutional quality, or by differences in bank regulation and supervision.

Download or read book Financial Intermediation and Growth written by Ross Levine and published by World Bank Publications. This book was released on 1999 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper evaluates (1) whether the exogenous component of financial intermediary development influences economic growth and (2) whether cross-country differences in legal and accounting systems (e.g., creditor rights, contract enforcement, and accounting standards) explain differences in the level of financial development. Using both traditional cross-section, instrumental variable procedures and recent dynamic panel techniques, we find that the exogenous component of financial intermediary development is positively associated with economic growth. Also, the data show that cross-country differences in legal and accounting systems help account for differences in financial development. Together, these findings suggest that legal and accounting reforms that strengthen creditor rights, contract enforcement, and accounting practices can boost development and accelerate economic growth.

Download or read book Finance and Growth written by Ross Levine and published by . This book was released on 2004 with total page 130 pages. Available in PDF, EPUB and Kindle. Book excerpt: "This paper reviews, appraises, and critiques theoretical and empirical research on the connections between the operation of the financial system and economic growth. While subject to ample qualifications and countervailing views, the preponderance of evidence suggests that both financial intermediaries and markets matter for growth and that reverse causality alone is not driving this relationship. Furthermore, theory and evidence imply that better developed financial systems ease external financing constraints facing firms, which illuminates one mechanism through which financial development influences economic growth. The paper highlights many areas needing additional research"--NBER website

Download or read book Causal relationship between financial development and economic growth theory and evidence written by Austin Muchafa Tirivavi and published by . This book was released on 2003 with total page 200 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Social Economic and Environmental Impacts Between Sustainable Financial Systems and Financial Markets written by Ziolo, Magdalena and published by IGI Global. This book was released on 2019-10-25 with total page 383 pages. Available in PDF, EPUB and Kindle. Book excerpt: Sustainable development is necessary to counteract and mitigate the impact of socially harmful forces in a globalized world. However, sustainable development and its organizations must ensure the effective management of their funds and beneficial financial frameworks in order to best realize their sustainable goals. There is a need for studies that seek to understand how to connect sustainable development and the financial world in order to maximize the economic and environmental wellbeing of the world. Social, Economic, and Environmental Impacts Between Sustainable Financial Systems and Financial Markets is a pivotal reference source that examines the funding and monetary utilization of environmental and socially-responsible entities. Featuring research on topics such as green taxes, intergenerational equity, and shadow economy, this book is ideally designed for government officials, policymakers, economists, financial managers, sustainability developers, and academicians seeking current research on the relationship between new sustainable financial phenomena and negative global externalities.

Download or read book Finance Growth Nexus Evidence from Indian Economy Using Causality Co Integration Test Based on Error Correction Model written by Manoj Dora and published by GRIN Verlag. This book was released on 2009-10-26 with total page 73 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2009 in the subject Business economics - General, grade: A, Vanderbilt University (Graduate Program in Economic Development), course: Masters in Economics, language: English, abstract: This study explores the relationship between financial growth and economic development in India using time series data over the period 1950-2007. The majority of the previous studies on this subject have used cross-sectional data, which may not address country specific issues. In addition, many studies used either OLS technique of estimation or bi-variate causality test and may, therefore suffer from the omission-of variable bias. This study attempts to examine the dynamic relationship between financial growth and economic development by including a range of financial variables like, quasi money for monetization, domestic credit for financial intermediation activities and bank asset for financial intermediary institutions. The casual relationship between economic development and financial growth indicators was examined with the help of Granger-Causality procedure based on Unrestricted Vector Auto Regression using the error correction term. The result from the cointegration tests indicates that financial development has a long-run equilibrium with economic growth. The financial sector and real sector move and evolve together in the same direction. The error correction model suggests that, in the short-run, the output variable is the only effective adjustment factor in the system that responds to the fluctuations of financial measures and domestic capital formation. On the other hand, the response of financial intensities and investments are sluggish adjustments that correct the deviation from equilibrium. In nutshell, this study shows that India's financial development and economic growth are positively correlated; the process of economic development is not sustainable without the contributions of the financial sector and vice versa.