Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/50893
Authors: 
Graff, Michael
Year of Publication: 
2005
Series/Report no.: 
Arbeitspapiere // Konjunkturforschungsstelle, Eidgenössische Technische Hochschule Zürich 106
Abstract: 
This paper addresses the notion of an optimum level of financial activity that is contingent on a country's general level of development. Referring to threshold regressions and a bootstrap test for structural shift of the finance regressor in a growth equation, it is shown that countries gain less from a given level of financial activity, if the latter fails to keep up with or exceeds what would follow from a balanced expansion path. The paper contributes to the literature on the finance-growth nexus in providing empirical support for the notion of balanced financial development with a development specific optimum level of financial activity.
Subjects: 
Optimum financial activity
Bayesian statistics
bootstrapping
JEL: 
O11
P17
C11
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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