Financial Development and Economic Growth: Views and Agenda
A growing body of empirical analyses, including firm-level studies, industry-level studies, individual country-studies, and broad cross country comparisons, demonstrate a strong positive link between the functioning of the financial system and long-run economic growth. Theory and evidence make it difficult to conclude that the financial system merely — and automatically — responds to industrialization and economic activity, or that financial development is an inconsequential addendum to the process of economic growth.
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