Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5083061 | International Review of Economics & Finance | 2017 | 26 Pages |
Abstract
The literature has established that financial institutions and financial markets have a significant impact on economic growth. The present paper seeks to determine whether they increase the speed of convergence towards the steady-state income. If so, then financial development is a convergence factor in addition to being a growth factor. To carry out our study, we employ the growth model of Ramsey-Cass-Koopman as well as that of Diamond. The RCK model predicts financial development positively affects the speed of convergence while the Diamond model predicts only a level effect. Our empirical analysis supports the prediction of the RCK model.
Related Topics
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Economics, Econometrics and Finance
Economics and Econometrics
Authors
Omid Ranjbar, Farhad Rassekh,