Open access
Author
Date
2005-08Type
- Working Paper
ETH Bibliography
yes
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Abstract
This paper addresses the notion of an "optimum level of financial activity" that is contingent on a country's general level of development. Referring to threshold regressions and a bootstrap test for structural shift of the finance regressor in a growth equation, it is shown that countries gain less from a given level of financial activity, if the latter fails to keep up with or exceeds what would follow from a balanced expansion path. The paper contributes to the literature on the finance-growth nexus in providing empirical support for the notion of "balanced" financial development with a development specific optimum level of financial activity. Show more
Permanent link
https://doi.org/10.3929/ethz-a-005104837Publication status
publishedJournal / series
KOF Working PapersVolume
Publisher
KOF Swiss Economic Institute, ETH ZurichSubject
OPTIMIERUNGSMODELLE (OPERATIONS RESEARCH); OPTIMIZATION MODELS (OPERATIONS RESEARCH); BAYESIAN THEORY (PROBABILITY THEORY); ECONOMIC DEVELOPMENT; Bootstrapping; WIRTSCHAFTSENTWICKLUNG; FINANZWESEN; BAYESSCHE THEORIE (WAHRSCHEINLICHKEITSRECHNUNG); Bayesian statistics; FINANCE; Optimum financial activityOrganisational unit
02525 - KOF Konjunkturforschungsstelle / KOF Swiss Economic Institute
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ETH Bibliography
yes
Altmetrics