Efficiency, depth and growth: Quantitative implications of finance and growth theory

Alex Trew

doi:10.1016/j.jmacro.2007.12.005

Efficiency, depth and growth: Quantitative implications of finance and growth theory

Alex Trew

Research output: Contribution to journal › Article › peer-review

11 Citations (Scopus)

Abstract

We develop a parsimonious finance and endogenous growth model with microeconomic frictions in entrepreneurship and a role for credit constraints. We demonstrate that though an efficiency-growth relation will always exist, the efficiency-depth-growth relation may not. This has implications for the connection between the theory and empirics of finance and growth. We go on to ask whether the model can account for some historical trends in growth, financial depth and financial efficiency for the UK over the period 1850-1913. The best model of finance and growth is one that departs from the standard depth-growth link. (C) 2007 Elsevier Inc. All rights reserved.

Original language	English
Pages (from-to)	1550-1568
Number of pages	19
Journal	Journal of Macroeconomics
Volume	30
DOIs	https://doi.org/10.1016/j.jmacro.2007.12.005
Publication status	Published - Dec 2008

Keywords

Finance and growth
Endogenous growth
Economic history
INDUSTRIAL-REVOLUTION
HISTORICAL EVIDENCE
ENDOGENOUS GROWTH
ECONOMIC-GROWTH
INTERMEDIATION
MARKETS
MODEL

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.jmacro.2007.12.005

Cite this

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abstract = "We develop a parsimonious finance and endogenous growth model with microeconomic frictions in entrepreneurship and a role for credit constraints. We demonstrate that though an efficiency-growth relation will always exist, the efficiency-depth-growth relation may not. This has implications for the connection between the theory and empirics of finance and growth. We go on to ask whether the model can account for some historical trends in growth, financial depth and financial efficiency for the UK over the period 1850-1913. The best model of finance and growth is one that departs from the standard depth-growth link. (C) 2007 Elsevier Inc. All rights reserved.",

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language = "English",

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journal = "Journal of Macroeconomics",

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PY - 2008/12

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AB - We develop a parsimonious finance and endogenous growth model with microeconomic frictions in entrepreneurship and a role for credit constraints. We demonstrate that though an efficiency-growth relation will always exist, the efficiency-depth-growth relation may not. This has implications for the connection between the theory and empirics of finance and growth. We go on to ask whether the model can account for some historical trends in growth, financial depth and financial efficiency for the UK over the period 1850-1913. The best model of finance and growth is one that departs from the standard depth-growth link. (C) 2007 Elsevier Inc. All rights reserved.

KW - Finance and growth

KW - Endogenous growth

KW - Economic history

KW - INDUSTRIAL-REVOLUTION

KW - HISTORICAL EVIDENCE

KW - ENDOGENOUS GROWTH

KW - ECONOMIC-GROWTH

KW - INTERMEDIATION

KW - MARKETS

KW - MODEL

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DO - 10.1016/j.jmacro.2007.12.005

M3 - Article

SN - 0164-0704

VL - 30

SP - 1550

EP - 1568

JO - Journal of Macroeconomics

JF - Journal of Macroeconomics

ER -

Efficiency, depth and growth: Quantitative implications of finance and growth theory

Abstract

Keywords

UN SDGs

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