Financial Development and Economic Growth: Views and Agenda

ArXiv ID: ssrn-604955 “View on arXiv”

Authors: Unknown

Abstract

October 1996

A growing body of theoretical and empirical work would push even skeptics toward the belief that the development of financial markets and instit

Keywords: Financial markets development, Financial institutions, Economic growth, Market liberalization, Financial sector reform, Macro

Complexity vs Empirical Score

• Math Complexity: 2.0/10
• Empirical Rigor: 3.0/10
• Quadrant: Philosophers
• Why: The paper synthesizes existing theoretical and empirical work, using primarily descriptive arguments and regression evidence without developing novel mathematical models or presenting backtest-ready code/data. The mathematics is light, focusing on conceptual relationships rather than dense equations, and the empirical work relies on cross-country comparisons that are foundational but not implementation-heavy.

  flowchart TD
    A["Research Goal: Impact of Financial Sector Development on Economic Growth"] --> B["Data/Inputs<br>Time-series & Cross-country data<br>Market Liberalization & Institutional Reform Metrics"]
    B --> C["Methodology<br>Empirical Regression Analysis<br>Causality Testing (Granger)"]
    C --> D["Computational Process<br>Estimate Growth Models<br>Control for Macro Factors<br>Test Financial Depth Indicators"]
    D --> E["Key Findings<br>1. Financial development leads growth<br>2. Market liberalization boosts efficiency<br>3. Institutional reform is critical<br>4. Causality runs from Finance to Growth"]