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Financial Development, Growth, and the Distribution of Income / Jeremy Greenwood, Boyan Jovanovic.
- Format:
- Book
- Author/Creator:
- Greenwood, Jeremy.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w3189.
- NBER working paper series no. w3189
- Language:
- English
- Subjects (All):
- Rate of return--Mathematical models.
- Rate of return.
- Capital investments--Mathematical models.
- Capital investments.
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1989.
- Cambridge, Massachusetts : National Bureau of Economic Research, 1989.
- Summary:
- A paradigm is presented where both the extent of financial intermediation and the rate of economic growth are endogenously determined. Financial intermediation promotes growth because it allows a higher rate of return to be earned on capital, and growth in turn provides the means to implement costly financial structures. Thus, financial intermediation and economic growth are inextricably linked in accord with the Goldsmith-McKinnon-Shaw view on economic development. The model also generates a development cycle reminiscent of the Kuznets hypothesis. In particular, in the transi tion from a primitive slowgrowing economy to a developed fast-growing one, a nation passes through a stage where the distribution of wealth across the rich and poor widens.
- Notes:
- Print version record
- December 1989.
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