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http://hdl.handle.net/10419/50893
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| Title: | | Is there an optimum level of financial activity?  |
| Authors: | | Graff, Michael |
| Issue Date: | | 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: | | doi:10.3929/ethz-a-005104837 |
| Document Type: | | Working Paper |
| Appears in Collections: | | KOF Working Papers, KOF Konjunkturforschungsstelle, ETH Zürich
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