Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/153221
Authors: 
Papaioannou, Elias
Year of Publication: 
2007
Series/Report no.: 
ECB Working Paper 787
Abstract: 
This paper reviews the literature on the finance-growth nexus within a neoclassical growth framework, placing an emphasis on the policy implications in the current European environment, that has placed financial reforms high on the policy Agenda. While more research is needed to establish causality and verify the theoretical channels linking access to finance and growth, firm-level, industry-level, macro, and country-specific studies all tend to show a significant correlation between financial efficiency and economic performance. The empirical evidence hint that in underdeveloped and emerging countries financial development fosters aggregate growth mainly by lowering the cost of capital, while in advanced economies by raising total-factor-productivity.
Subjects: 
Development
Europe
finance
Financial Institutions
Financial Intermediation
Growth Decomposition
productivity
JEL: 
G00
O00
Document Type: 
Working Paper

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