Finance and Growth: What we Know and What we Need to Know

By Panicos O. Demetriades, S. Andrianova. 2004

214 citations recorded by the source corpus.

In modern economies finance underpins virtually every economic transaction that takes place. When we go to the supermarket, we usually pay using credit or debit cards issued by commercial banks (or the supermarkets themselves). Even when we pay using cash, we have to first find an ATM in order to withdraw the necessary bank notes. The banking system, which includes commercial banks as well as the central bank (the Bank of England in the United Kingdom), provides the payments system which makes economic exchange possible. It is hard to imagine what economies would look like without ‘money’ — broadly defined as anything that is used in exchange for goods and services and the settlement of debt. Besides providing the means of payment, which underpins all economic transactions, the financial system provides a link between current and future output and consumption. When we borrow from a bank to buy a car, we are essentially bringing forward consumption against future income. This is made possible because financial intermediaries, like banks, raise funds from surplus units (those economic agents whose income is greater than their current expenditure) and pass them on as loans to deficit units (those economic agents whose income is less than their current expenditure).

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/ce3de769a44c7c3738ce46751565a54ae2504314

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Citations in the corpus

Trade Openness, Capital Flows and Financial Development in Developing Economies (2009, background): “…has long maintained that a well-developed financial system is a vital prerequisite to economic growth (King & Levine, 1993a, b; Levine, 1997, 2003; Demirguc-Kunt & Maksimovic, 1998; Rajan & Zingales, 1998; Darrat, 1999; Dritsakis & Adamopoulos, 2004; Demetriades & Andrianova, 2004; Honohan, 2004).”
Financial Development and Openness: Evidence from Panel Data (2009, unknown): “It is now widely accepted that financial development constitutes a potentially important mechanism for long-run growth (Levine, 2003; Demetriades and Andrianova 2004; Demetriades and Hussein, 1996; Goodhart, 2004).”
The Political Economy of Financial Development (2004, background): “1 See Levine (2003) and Demetriades and Andrianova (2004) for excellent recent overviews of the literature.”
Institutional quality thresholds and the finance Growth nexus. (2013, background): “Demetriades and Andrianova (2004) and Arestis and Demetriades (1996) highlighted that varying relationships may reflect differences in the quality of finance, which is determined by the quality of financial regulation and rule of law.”
Institutional Quality and Financial Development: Evidence from Developing and Emerging Economies (2020, result): “These findings are unfailing with prevailing studies, which indicates the linkage between financial and economic development might be reliant on quality institutions and financial depth (e.g., (Demetriades & Andrianova, 2004; Rioja & Valev, 2004).”
Government Ownership of Banks, Institutions, and Financial Development (2006, background): “It is now widely accepted that well functioning financial systems can help promote economic growth, especially in middle income countries (Rioja and Valev 2004, Demetriades and Andrianova 2004).”
Nonlinear dynamics of the finance-inequality nexus in developing countries (2012, background): “It is widely accepted that financial deepening constitutes a potentially important mechanism for sustaining long-term economic growth (see [1, 5, 8–12, 15, 18, 19, 22, 24], and many others).”
A Survey Of Recent Developments In The Literature Of Finance And Growth (2008, background): “Since causality is assessed relative to the information set at hand, if a variable helps predict another variable, this does not necessarily imply one causes another (Demetriades and Andrianova, 2004).”