TAILIEUCHUNG - Finance and the Sources of Growth

Joseph Schumpeter argued in 1911 that banks play a pivotal role in economic development because they choose which firms get to use society’ s savings. According to this view, the banking sector alters the path of economic progress by affecting the allocation of savings and not necessarily by altering the saving rate. Thus, the Schumpeterian view of finance and development highlights the impact of banks on productivity growth and technological change. | Finance and the Sources of Growth Thorsten Beck Ross Levine and Norman Loayza Beck University of Virginia and World Bank Levine University of Virginia Loayza Banco Central de Chile. This paper s findings interpretations and conclusions are entirely those of the authors and do not necessarily represent the views of the Banco Central de Chile World Bank its Executive Directors or the countries they represent. 1 I. Introduction Joseph Schumpeter argued in 1911 that banks play a pivotal role in economic development because they choose which firms get to use society s savings. According to this view the banking sector alters the path of economic progress by affecting the allocation of savings and not necessarily by altering the saving rate. Thus the Schumpeterian view of finance and development highlights the impact of banks on productivity growth and technological Alternatively a vast development economics literature argues that capital accumulation is the key factor underlying economic According to this view better banks influence growth primarily by raising domestic saving rates and attracting foreign capital. Our paper empirically assesses the impact of banks on productivity growth capital accumulation private saving rates and overall growth. This paper is further motivated by a rejuvenated movement in macroeconomics to understand cross-country differences in both the level and growth rate of total factor productivity. A long empirical literature successfully shows that something else besides physical and human capital accounts for the bulk of cross-country differences in both the level and growth rate of real per capita Gross Domestic Product GDP . Nevertheless economists have been relatively unsuccessful at fully characterizing this residual which is generally termed total factor productivity. Recent papers by Hall and Jones 1998 Harberger 1998 Klenow 1998 and Prescott 1998 have again focused the profession s attention on the need for improved .

• Kinh tế học
• Finance and the Sources of Growth
• the banking sector
• capital accumulation
• capital accumulation
• economic growth
• econometric techniques
• Gender diversity
• Firm’s performance
• Two stage least squares estimation
• Instrument variables