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Code and data files for "Quantifying the Impact of Financial Development on Economic Development"
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TLDR
In this article, a costly state verification model of financial intermediation is presented to address the question of how important financial development for economic development, and the model is calibrated to match facts about the U.S. economy, such as the intermediation spreads and the firm-size distributions for 1974 and 2004.Abstract:
How important is financial development for economic development? A costly state verification model of financial intermediation is presented to address this question. The model is calibrated to match facts about the U.S. economy, such as the intermediation spreads and the …firm-size distributions for 1974 and 2004. It is then used to study the international data using cross-country interest-rate spreads and per-capita GDPs. The analysis suggests a country like Uganda could increase its output by 116 percent if it could adopt the world’s best practice in the financial sector. Still, this amounts to only 29 percent of the gap between Uganda’s potential and actual output.read more
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Intangible Capital and Economic Growth
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Financial development and the sources of growth and convergence
TL;DR: The authors extended the production frontier framework by incorporating financial development and showed that failure to account for financial development overstates the role of physical capital accumulation in labor productivity growth, most of this overstated contribution stems from the efficiencyenhancing role of well-functioning financial institutions, international polarization is solely driven by efficiency changes (catching-up), and increased distributional dispersion of productivity is primarily driven by technological change.
BookDOI
Where is the cheese ? synthesizing a giant literature on causes and consequences of financial sector development
TL;DR: In this paper, a comprehensive literature review concerning the quantitative effects of financial development on economic growth and employment, and various determinants of financial sector development is presented, and the authors identify some missing avenues in the literature and provide a number of suggestions for future work.
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Innovation and Growth with Financial, and Other, Frictions
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References
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Finance and Growth: Schumpeter Might Be Right
TL;DR: In this paper, the authors examined a cross-section of about 80 countries for the period 1960-89 and found that various measures of financial development are strongly associated with both current and later rates of economic growth.
Journal ArticleDOI
Financial Intermediation and Delegated Monitoring
TL;DR: In this paper, the authors developed a theory of financial intermediation based on minimizing the cost of monitoring information which is useful for resolving incentive problems between borrowers and lenders, and presented a characterization of the costs of providing incentives for delegated monitoring by a financial intermediary.
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BookDOI
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