February 4, 2014

Banks, Financial Markets and Growth in Developed Countries: a Survey of the empirical literature

We review the literature on finance and growth with a focus on developed countries
Main image

We find little evidence that increases in the traditional proxies for financial development will enhance growth in these countries. Potential causes include: decreasing returns, misallocation of credit, difficulties in measuring efficient financial development, and increasing macroeconomic or systemic risk. To stimulate efficient financial intermediation, policy makers should focus on lending to firms instead of consumers; avoid too high concentration levels; and keep government ownership of banks at a minimum.

Contacts

Michiel Bijlsma Read more
Foto Andrei Dubovik
Andrei Dubovik +31 6 15090496 Read more

Read more about