Trew, A. (2008) Efficiency, depth and growth: Quantitative implications of finance and growth theory. Journal of Macroeconomics, 30(4), pp. 1550-1568. (doi: 10.1016/j.jmacro.2007.12.005)
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Abstract
We develop a parsimonious finance and endogenous growth model with microeconomic frictions in entrepreneurship and a role for credit constraints. We demonstrate that though an efficiency–growth relation will always exist, the efficiency–depth–growth relation may not. This has implications for the connection between the theory and empirics of finance and growth. We go on to ask whether the model can account for some historical trends in growth, financial depth and financial efficiency for the UK over the period 1850–1913. The best model of finance and growth is one that departs from the standard depth–growth link.
Item Type: | Articles |
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Additional Information: | Supported by funding from the Centre for Dynamic Macroeconomic Analysis at St. Andrews and from Shell Foundation. |
Status: | Published |
Refereed: | Yes |
Glasgow Author(s) Enlighten ID: | Trew, Professor Alex |
Authors: | Trew, A. |
College/School: | College of Social Sciences > Adam Smith Business School > Economics |
Journal Name: | Journal of Macroeconomics |
Publisher: | Elsevier |
ISSN: | 0164-0704 |
ISSN (Online): | 1873-152X |
Published Online: | 28 December 2007 |
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