Details

Autor(en) / Beteiligte

• Samargandi, Nahla
• Fidrmuc, Jan
• Ghosh, Sugata

Titel

Is the Relationship Between Financial Development and Economic Growth Monotonic? Evidence from a Sample of Middle-Income Countries

Ist Teil von

• World development, 2015-04, Vol.68, p.66-81

Ort / Verlag

Oxford: Elsevier Ltd

Erscheinungsjahr

2015

Link zum Volltext

Quelle

PAIS Index

Beschreibungen/Notizen

• •We revisit the relationship between financial development and economic growth.•Our analysis covers middle-income countries from 1980 to 2008.•We find an inverted U-shaped relationship between finance and growth in the long run.•The short-run relationship is insignificant.•This suggests a threshold beyond which financial development does not boost growth. We revisit the relationship between financial development and economic growth in a panel of 52 middle-income countries over the 1980–2008 period. Using pooled mean group estimations in a dynamic heterogeneous panel setting, we show that there is an inverted U-shaped relationship between finance and growth in the long run. In the short run, the relationship is insignificant. This suggests that too much finance can exert a negative influence on growth in middle-income countries. The finding of a non-monotonic effect of financial development on growth is confirmed by estimating a threshold model.