Work

Too much finance?

Year: 2015

Type: article

Abstract: This paper examines whether there is a threshold above which financial depth no longer has a positive effect on economic growth. We use different empirical approaches to show that financial depth starts having a negative effect on output growth when credit to the private sector reaches 100 % of GDP. Our results are consistent with the “vanishing effect” of financial depth and that they are not driven by endogeneity, output volatility, banking crises, low institutional quality, or by differences in bank regulation and supervision.

Source: Journal of Economic Growth

DOI: 10.1007/s10887-015-9115-2

Authors: Jean Louis Arcand, Enrico Berkes, Ugo Panizza

Institutions: Fondation pour les Études et Recherches sur le Développement International, Graduate Institute of International and Development Studies, Northwestern University, Centre for Economic Policy Research

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $4,290