In Favour of Financial Liberalisation

Fry, Maxwell J.

doi:10.1111/1468-0297.00191

Cited by 75 publications

(86 citation statements)

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“…Nevertheless, Fry (1997) and Ang and McKibbin (2007) among others argue that monetary aggregates are not good proxies for financial development since they reflect the extent of transaction services provided by the financial system rather than the ability of the financial system to channel funds from depositors to investors. Therefore, credit to the private sector as a proportion of GDP is the third most widely used alternative measure of financial development (see Demetriades and Hussein, 1996;King and Levine, 1993a;Beck et al, 2000a;Favara, 2003;Liang and Teng, 2006;Arcand et al, 2011).…”

Section: Measures Of Financial Developmentmentioning

confidence: 99%

Is the Relationship Between Financial Development and Economic Growth Monotonic? Evidence from a Sample of Middle-Income Countries

2015

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We revisit the relationship between financial development and economic growth in a panel of 52 middle-income countries over the 1980-2008 period. Using pooled mean group estimations in a dynamic heterogeneous panel setting, we show that there is an inverted U-shaped relationship between finance and growth in the long-run. In the short run, the relationship is insignificant. This suggests that too much finance can exert a negative influence on growth in middle-income countries. The finding of a non-monotonic effect of financial development on growth is confirmed by estimating a threshold model.

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Section: Measures Of Financial Developmentmentioning

confidence: 99%

Is the Relationship Between Financial Development and Economic Growth Monotonic? Evidence from a Sample of Middle-Income Countries

2015

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“…This argument is strengthened by the fact that growth rates in countries with trade openness and financial policies outperform those with restrictive financial and trade policies [8,15,18,35] .…”

Section: Introductionmentioning

confidence: 99%

“…Later, many studies were elaborated to verify the relationship between financial development and growth. Demetriades and Luintel [11] , Fry [15] and King and Levine [32] are examples of econometrics studies that found a positive relationship between financial development and growth. However, Singh [55] has argued that financial development increases the macroeconomic instability, thereby having a negative effect on economic growth.…”

Section: Introductionmentioning

confidence: 99%

Causal Relationships between Financial Development, Trade Openness and Economic Growth: The Case of Turkey

Yücel¹

2009

J. of Social Sciences

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Problem statement:The main objective of this study was to examine the causality relations between financial development, trade openness and economic growth (GDP) for the Turkish economy. Approach: In time series context, recently developed econometric techniques were used: namely the Augmented Dickey-Fuller (ADF) for unit root, Johansen and Juselius (JJ) for cointegration and Granger causality test for causal relationships. Results: The findings of the study showed that while trade openness has a positive effect, financial development has a negative effect on growth. Conclusion: Moreover, the Granger causality test results revealed the presence of bicausal relationship between financial development, trade openness and growth indicating that economic policies aimed at financial development and trade openness have a statistically significant impact on economic growth.

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“…W hi l e expl anat i ons of t hi s 'm i racl e' abound (e. g. W or l d Bank, 1993), t he i m port ant quest i on of what wer e t he eff ect s of pervasi ve governm ent i nt ervent i on i n t he f i nanci al syst em i s st i l l unanswered. Besi des i t s si gni f i cant r el evance f or pol i cy m aker s i n ot her devel opi ng count ri es, t hi s quest i on i s al so cent ral t o t he academ i c debat e concerni ng t he benefi t s and cost s of f i nanci al l i beral i sat i on ( M cKi nnon, 1973;Shaw , 1973;Fry, 1995;Fry, 1997;St i gl i t z, 1994; St i gl i t z, 1998; Si ngh, 1997; Ar est i s and Dem et ri ades, 1999). I n t hi s paper we provi de novel em pi r i cal evi dence on t he eff ect s of f i nanci al r est r ai nt s i n Sout h Kor ea, whi ch sheds new l i ght on t he mechani sm of f i nanci al deepeni ng.…”

Section: Introductionmentioning

confidence: 99%

Financial restraints in the South Korean miracle

Demetriades

Luintel

2001

Journal of Development Economics

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W e pr ovi de novel em pi r i cal evi dence on t he eff ect s of fi nanci al rest r ai nt s on Sout h Kor ean fi nanci al devel opm ent . The evi dence i s l i nked t o a si m pl e m odel of t he Kor ean banki ng syst em t hat encapsul at es i t s cart el i sed nat ure, whi ch predi ct s a posi t i ve associ at i on bet w een fi nanci al devel opm ent and (i ) t he degree of st at e cont r ol over t he banki ng syst em , (i i ) m i l d repressi on of l endi ng rat es. The m odel al so predi ct s t hat i n t he presence of l endi ng rat e cont rol s, i ncreases i n t he l evel of t he adm i ni st ered deposi t rat e are unl i kel y t o i nfl uence fi nanci al deepeni ng. W e t est t he m odel em pi r i cal l y by const r uct i ng i ndi vi dual and sum m ar y m easures of f i nanci al r est r ai nt s. Our em pi r i cal f i ndi ngs are consi st ent wi t h our t heoret i cal predi ct i ons but cont rast sharpl y w i t h t he predi ct i ons of earl i er l i t erat ure t hat post ul at es t hat i nt erest r at e cei l i ngs and ot her f i nanci al r est r ai nt s const i t ut e sources of ' f i nanci al r epressi on'.

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In Favour of Financial Liberalisation

Cited by 75 publications

References 0 publications

Is the Relationship Between Financial Development and Economic Growth Monotonic? Evidence from a Sample of Middle-Income Countries

Is the Relationship Between Financial Development and Economic Growth Monotonic? Evidence from a Sample of Middle-Income Countries

Causal Relationships between Financial Development, Trade Openness and Economic Growth: The Case of Turkey

Financial restraints in the South Korean miracle

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