We provide evidence from a large number of countries which demonstrates the changing nature of the finance–growth nexus. Specifically, we show that financial depth is no longer a significant determinant of long-run growth. Instead we find evidence to suggest that certain financial reforms have sizeable growth effects, which can be positive or negative depending on how well banks are regulated and supervised.
This is an output from the ‘Politics, Finance and Growth’ Project
Panicos O. Demetriades, Peter L. Rousseau, The changing face of financial development, Economics Letters, Volume 141, 2016, Pages 87-90,
The changing face of financial development