Finanzielle Entwicklung und reales Wirtschaftswachstum

Michael Graff analyses the significance of financial development as a determinant of economic growth and discusses how to measure and operationalise the concept 'financial development'. A large socio-economic panel data set of traditional variables as well as new proxies for technological and financial development serve as a basis for emipirical cross-country panel evaluations of regularities and rigorous statistical tests of a set of hypotheses identified in the literature. The empirical analysis shows that these variables fare very well as explanatory variables in the standard fixed effects growth regression approach. In addition, while there are signs of positive and unidirectional causality from financial development to economic growth, giving some support to the 'supply-leading finance' hypothesis, the relationship is far from stable on a long-term basis.