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December 5, 2010 | History

The effect of financial development on convergence 1 edition

The effect of financial development on convergence
Philippe Aghion

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The effect of financial development on convergence
theory and evidence
Philippe Aghion, Peter Howitt, David Mayer-Foulkes.

Published 2004 by National Bureau of Economic Research in Cambridge, MA .
Written in English.

About the Book

"We introduce imperfect creditor protection in a multi-country version of Schumpeterian growth theory with technology transfer. The theory predicts that the growth rate of any country with more than some critical level of financial development will converge to the growth rate of the world technology frontier, and that all other countries will have a strictly lower long-run growth rate. The theory also predicts that in a country that converges to the frontier growth rate, financial development has a positive but eventually vanishing effect on steady-state per-capita GDP relative to the frontier. We present cross-country evidence supporting these two implications. In particular, we find a significant and sizeable effect of an interaction term between initial per-capita GDP (relative to the United States) and a financial intermediation measure in an otherwise standard growth regression, implying that the likelihood of converging to the U.S. growth rate increases with financial development. We also find that, as predicted by the theory, the direct effect of financial intermediation in this regression is not significantly different from zero. These findings are robust to alternative conditioning sets, estimation procedures and measures of financial development"--National Bureau of Economic Research web site.

Edition Notes

Includes bibliographical references.
Title from PDF file as viewed on 1/18/2005.
Also available in print.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.

Series
NBER working paper series ;, working paper 10358, Working paper series (National Bureau of Economic Research : Online) ;, working paper no. 10358.

Classifications

Library of Congress
HB1

The Physical Object

Format
Electronic resource

ID Numbers

Open Library
OL3476291M
LC Control Number
2005615756

History Created December 8, 2009 · 2 revisions Download catalog record: RDF / JSON

December 5, 2010 Edited by Open Library Bot Added subjects from MARC records.
December 8, 2009 Created by ImportBot add works page