Finance and Balanced Growth

Alex William Trew

    Research output: Working paper


    The Uzawa (1961) theorem applied to finance and growth suggests that a long-run positive correlation between financial efficiency and depth is only present when variations in the extent of access to financial services are considered. Improvements in financial efficiency can lead to new capital augmenting technologies along the balanced path, but only improvements in financial efficiency directed towards labor can change the rate of growth in the long-run. These findings suggest ways to understand some of the more nuanced relationships between finance and growth observed in the data and point in a number of directions for future research.
    Original languageEnglish
    Publication statusPublished - Jul 2010

    Publication series

    NameCentre for Dynamic Macroeconomic Analysis, Working Paper


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