Phd thesis on financial development and economic growth

Phd thesis on financial development and economic growth

The relationship between financial development and economic growth remains an enigma for the economists. Extensive reviews of the literature point out conflicting empirical evidence. Results also Estimated Reading Time: 7 mins influential thesis of Simon Kuznets (), which posits a relationship between a country's economic growth and its income distribution profile. Kuznets' thesis is discussed at length and compared to other interpretations of the relationship. The Colombian experience is then brought in, as a case study with Jun 21,  · financial development is positively and significantly associated with economic growth, our evidence suggests that, in almost all the threshold variables, below a certain estimated threshold, financial sector development is positively and insignificantly related to growth

Phd Thesis On Financial Development And Economic Growth

There are three views about the relation between economic growth and financial development. First, financial development has impact on economic growth i.

Bagehot, ; Schumpeter, ; McKinnon, ; Shaw, ; Patrick, ; Goldsmith, ; Fry, Second, economic growth leads to financial development and that where there is economic growth financial development follows i. Robinson, The third view, however, contends that both financial development and economic growth Granger cause one another.

In the essay, our group focus on the first view which financial development will has passive influence on economic growth. During the year from tomany scholars has study the relationship between financial development and economic growth. Along with the time goes, the theory that financial development will real promote economic growth has been more and more prefect. In the years between s and s, economists such as Gurley and Shaw began to stress the credit markets and the importance of financial intermediaries, which they believed play an important role in economy.

InGurley and Shaw bring up the development of financial institution is both a determined and determining variable in the growth process. Gurley and Shaw,p. Gurley and Shaw stressed that financial intermediaries exert influence on credit supply rather than money supply. In this way, financial intermediaries improve the efficiency of savings turning into investments and then affect the whole economic activities.

They are the earliest scholars to study in-depth the relationship between financial and economic development in developing countries. Gurley and Shaw pointed out that the main access road of monetary policy transmission probably have diverted from money quantity, phd thesis on financial development and economic growth, which is traditionally thought as the medium of exchange.

Order custom essay Economic Growth and Financial Development with free plagiarism report. They put forward financial development enhances the intermediation of loanable funds and therefore growth will be stimulated and they have a debt-intermediation view, phd thesis on financial development and economic growth.

The Debt-intermediation view establishes relations between finance and growth. First, economic growth would be associated with financial development, as external indirect finance provides surplus units with the capacity to spend beyond their earnings. Gurley and Shaw has earlier pointed that the growing importance of NBFI non-bank financial intermediaries when they discussed their activities about potentially serious problems for monetary management and monetary policy. Wealth and income incent the demand for financial services.

The supply-leading hypothesis supposes a causal relationship from financial development to economic growth, which means mature creation of financial institutions and markets increases the supply of financial services, and thus leads to real economic growth.

Patrick suggests that initial development is spurred by supply-leading process, which gives way to demand-following process. He posed financial institutions and services emerge as demand for those services unfolds. The idea is that finance is passive in the growth process, but lack of financial institutions may prevent growth to occur. Financial institutions and their services precede the emergence of demand; government support is needed to finance and nascent modern sector, such as subsidized loans, information to phd thesis on financial development and economic growth business and long loan durations.

He points out the importance of finance in economic growth. The difficulty of establishing the link between financial development and economic growth was first identified by Patrickhe argued that a higher rate of financial growth is positively correlated with successful real growth.

Since the important work of Patrick, that first postulated a bi-directional phd thesis on financial development and economic growth between financial development and economic growth.

A large empirical literature has emerged testing this hypothesis as the Patrick's problem remains unresolved: What is the cause and what is the effect? Is finance a leading sector in economic development, or does it simply follow growth in real output which is generated elsewhere.

References: [1] de Oliviera Campos, R. and M. Wood and Roland C. This essay was written by a fellow student. You can use it as an example when writing your own essay or use it as a source, but you need cite it. Explore how the human body functions as one unit in harmony in order to life. Economic Growth and Financial Development.

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PhD Essay Economics Economic Growth Economic Growth and Financial Development. Order original essay sample specially for your assignment needs. get custom essay. Female Education and Economic Growth. Essay type Process.

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Financial System and Economic Development

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This thesis is based on three empirical essays in financial development and economic growth. The first essay, investigated in the third chapter, the effect of financial development on economic growth in the context of Saudi Arabia, an oil-rich economy The discussion is focused on developingThe finding of this thesis is that bidirectional causality exist, between foreign direct investment and economic growth in Malaysia, i.e. while growth in GDP attracts FDL, FDI also contributes to an increase in blogger.com OF PHD DISSERTATION LEGAL REGULATION OF PUBLIC FINANCIAL MANAGEMENT, state has been based on the continuous /10() Thesis. Full-text available. Nov ; Kenza Medjahed; This research aims to examine the impact of financial development on economic growth in the context of developed and developing countries Estimated Reading Time: 9 mins