Infrastructure finance and industrial takeoff in England

Trew, A. (2010) Infrastructure finance and industrial takeoff in England. Journal of Money, Credit and Banking, 42(6), pp. 985-1010. (doi: 10.1111/j.1538-4616.2010.00317.x)

Abstract

That financial matters did not constrain industrial takeoff in the UK is generally accepted in the historical literature; in contrast, contemporary empirical analyses have found evidence that financial development can be a causal determinant of economic growth. We look to reconcile these findings by concentrating on a particular aspect of industrializing UK where inefficiencies in finance could have had bite: the finance of physical infrastructures. We document the historical record and develop the importance of spatial disaggregation and spillovers in both technological and financial development. We develop a simple model that captures the nature of infrastructure finance within a theory of endogenous growth where financial costs are endogenous. We argue that the conception of the finance‐growth nexus as a largely static, aggregative phenomenon misses out a good deal of complexity and we relate that complexity to a number of implications for regulation of both financial systems and the emergence of infrastructures.

• Item Type: Articles
• 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 Money, Credit and Banking
• Publisher: Wiley
• ISSN: 0022-2879
• ISSN (Online): 1538-4616