What determines the finance-growth nexus? Empirical evidence for threshold models

Graff, Michael and Karmann, Alexander (2006) What determines the finance-growth nexus? Empirical evidence for threshold models. Journal of Economics, 87 2: 127-157. doi:10.1007/s00712-005-0161-7


Author Graff, Michael
Karmann, Alexander
Title What determines the finance-growth nexus? Empirical evidence for threshold models
Journal name Journal of Economics   Check publisher's open access policy
ISSN 0931-8658
Publication date 2006-03
Sub-type Article (original research)
DOI 10.1007/s00712-005-0161-7
Volume 87
Issue 2
Start page 127
End page 157
Total pages 31
Editor D. Boes
Place of publication Vienna, Austria
Publisher Springer
Collection year 2006
Language eng
Subject 340203 Finance Economics
340208 Macroeconomics (incl. Monetary and Fiscal Theory)
720199 Macroeconomic issues not elsewhere classified
Abstract This paper elaborates the notion of balanced'' financial development that is contingent on a country's general level of development. We develop an empirical framework to address this point, referring to threshold regressions and a bootstrap test for structural shift in a growth equation. We find that countries gain less from financial activity, if the latter fails to keep up with or exceeds what would follow from a balanced expansion path. These analyses contribute to the finance and growth literature in providing empirical support for the balanced'' financial development hypothesis.
Keyword Optimum Financial Activity
Thresholds
Bootstrapping
Economics
Economic-growth
Performance
Sector
Inflation
Markets
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Excellence in Research Australia (ERA) - Collection
2007 Higher Education Research Data Collection
School of Economics Publications
 
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Created: Wed, 15 Aug 2007, 09:29:09 EST