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on Financial Development and Growth |
| By: | Ioana-Maria Dobjanschi (Acamedy of Economics Studies, Bucharest) |
| Abstract: | The correlation between financial market development and economic growth was and is still an intensively studied theme from the theoretical and empirical point of view. Because of this fact, the main goal of this article is to theoretically and empirically discover the relationship between thefinancial markets and economic growth using panel regression, OLS method. The database used is composed from some variables for 30 countries during the period 2006-2016 and the frequency of the data is annual. |
| Keywords: | economic growth, financial markets development, capital market, banking market, panel regression |
| JEL: | C33 E51 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:fst:wpaper:0023&r=all |
| By: | Lilas Demmou; Irina Stefanescu; Axelle Arquie |
| Abstract: | Investment in intangible assets has become an increasingly important driver of productivity growth in OECD countries. Facing stronger informational asymmetries and harder to value collateral, intangible investment is subject to more severe financial constraints and relies more on internal rather than external capital. To test the hypothesis that the availability of finance, and financial development in particular, is more important for productivity growth in sectors that are intensive in intangible assets, an empirical analysis is carried over a panel of 32 countries and 30 industries, from 1990 to 2014. Overall, results confirm that the impact of financial development on labour productivity is not uniform across sectors. It varies based on country-specific institutional settings and sector-specific characteristics such as the intangible asset intensity, financial structure and external financial dependence. Policies and institutional settings may relax financial constraints by: i) altering the overall composition of finance; ii) encouraging competition and iii) strengthening the legal environment in which businesses operate. |
| Keywords: | Financial Development, Intangible assets, Productivity Growth |
| JEL: | G10 G21 |
| Date: | 2019–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1547-en&r=all |
| By: | João Tovar Jalles; Luiz de Mello |
| Abstract: | Widening income disparities and slow productivity growth in most advanced, and several emerging-market, economies have rekindled interest in the empirical analysis of the determinants of inclusive growth, defined in this paper as episodes of increases in GDP per capita without a concomitant deterioration in the distribution of household disposable income.The empirical analysis is based on a chronology of inclusive growth episodes between 1980 and 2013 for a sample of 78 countries.Logit and multinomial probit estimations show that human capital accumulation, the redistributive potential of tax-benefit systems, increases in multifactor productivity and labor force participation, as well as trade openness and a range of institutional factors, including political system durability and electoral regimes, are important determinants of the probability of occurrence of inclusive growth. This empirical evidence contributes to the policy debate about how countries can deal with efficiency-equity trade-offs. |
| Keywords: | growth, income distribution, multinomial probit, relogit |
| JEL: | O47 O15 D31 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp0812019&r=all |
| By: | Ion Stancu (Institute of Financial Studies Bucharest); Andrei Tudor Stancu (Norwich Business School, UK); Iulian Panait (Financial Supervisory Authority) |
| Abstract: | There is a vast literature on developing a composite index of relevant macroeconomic indicators that predicts the real economic growth. This is of great importance not only for international financial institutions (e.g. IMF, ECB), central banks, and financial supervisory authorities, but also for the private sector (credit rating agencies). Our goal is to build a Financial Stability Index (FSI) or financial stress index that tracks economic growth in Romania. We constructed a composite index using a linear combination of financial variables that are considered to have a significant impact on economic activity. These financial variables are weighted with respect to their cumulated two quarters impulse response on GDP growth, as estimated by a VAR model. Developing such a composite index of financial stability or financial stress has two main utilities: • The analysis of the correlation between financial variables and the real economy placed in the context of different historical episodes of financial crisis. Also, this correlation analysis reveals, in each period, the significant positive or negative contribution of each financial variable to real economic growth. Following this analysis, the FSI can measure the impact of economic and financial policy measures aimed at mitigating financial crises. • The short-term prediction of real economic growth estimated by forecasting the next period evolution of the real economic activity (GDPt+1) using current period GDPt and FSIt. Keywords: composite index, financial stress index, economic growth, VAR model, shortterm prediction JEL Classification: E63; G01; G28 |
| Keywords: | composite index, financial stress index, economic growth, VAR model, shortterm prediction |
| JEL: | E63 G01 G28 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:fst:wpaper:0001&r=all |
| By: | Ion Stancu (Institute of Financial Studies Bucharest); Andrei Tudor Stancu (Norwich Business School, UK); Iulian Panait (Financial Supervisory Authority) |
| Abstract: | In each issue of the Financial Studies Review, we update and publish the Financial Stability Index (FSI) of our Institute of Financial Studies, which tracks the correlation between economic growth and macroeconomic and financial factors in Romania.We constructeda composite index using a linear combination of financial variables that are considered to have a significant impact on economic activity. These financial variables are weighted with respect to their cumulated two quarters impulse response on GDP growth, as estimated by a VAR model.Developing such a composite index of financial stability or financial stresshas two main utilities:•The analysis of the correlation between financial variables and the real economy placed in the context of different historical episodes of financial crisis. Also, this correlation analysis reveals, in each period, the significant positive or negative contribution of each financial variable to real economic growth. Following this analysis, the FSIcan measure the impact of economic and financial policy measures aimed at mitigating financial crises. The short-term prediction of real economic growth estimated by forecasting the next period evolution of the real economic activity (GDPt+1) using current period GDPtand FSItand economic and financial variables in the FSItcomposition. |
| Keywords: | composite index, financial stress index, economic growth, VAR model, short-term prediction |
| JEL: | E63 G01 G28 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:fst:wpaper:0018&r=all |
| By: | Ion Stancu (Institute of Financial Studies Bucharest); Andrei Tudor Stancu (Norwich Business School, UK); Iulian Panait (Financial Supervisory Authority) |
| Abstract: | In each issue of the Financial Studies Review, we update and publish the Financial Stability Index (FSI) of our Institute of Financial Studies, which tracks the correlation between economic growth and macroeconomic and financial factors in Romania.We constructeda composite index using a linear combination of financial variables that are considered to have a significant impact on economic activity. These financial variables are weighted with respect to their cumulated two quarters impulse response on GDP growth, as estimated by a VAR model.Developing such a composite index of financial stability or financial stress has two main utilities:•The analysis of the correlation between financial variables and the real economy placed in the context of different historical episodes of financial crisis. Also, this correlation analysis reveals, in each period, the significant positive or negative contribution of each financial variable to real economic growth. Following this analysis, the FSIcan measure the impact of economic and financial policy measures aimed at mitigating financial crises.•The short-term prediction of real economic growth estimated by forecasting the next period evolution of the real economic activity (GDPt+1) using current period GDPtand FSIt. |
| Keywords: | composite index, financial stress index, economic growth, VAR model, shortterm prediction |
| JEL: | E63 G01 G28 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:fst:wpaper:0008&r=all |
| By: | Iftekhar Hasan (Fordham University and Bank of Finland); Roman Horvath; Jan Mares |
| Abstract: | Using a global sample, this paper investigates the determinants of wealth inequality capturing various economic, financial, political, institutional, and geographical indicators. Using instrumental variable Bayesian model averaging, it reveals that only a handful of indicators robustly matter and finance plays a key role. It reports that while financial depth increases wealth inequality, efficiency and access to finance reduce inequality. In addition, redistribution and education are associated with lower inequality whereas wars and openness to international trade contribute to greater wealth inequality. |
| Keywords: | Wealth inequality, finance, Bayesian model averaging |
| JEL: | D31 E21 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:ost:wpaper:378&r=all |
| By: | Wen, Lei; Zhou, Haiwen |
| Abstract: | Impact of economic integration on unemployment is studied in a general equilibrium model in which unemployment is a result of the existence of efficiency wages. Banks provide capital to manufacturing firms and engage in oligopolistic competition. Manufacturing firms choose technologies and also engage in oligopolistic competition. A country with a more efficient financial sector has a lower unemployment rate and a comparative advantage in producing manufactured goods. Trade integration decreases the unemployment rate and increases the wage rate and the equilibrium level of technology. An additional financial integration will decrease the unemployment rate and increase the wage rate and the level of technology further. |
| Keywords: | Unemployment, economic integration, efficiency wages, choice of technology, two-tier oligopoly |
| JEL: | E24 F12 J64 |
| Date: | 2019–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:93835&r=all |