Financial developments and the rate of growth of output: An alternative approach

Rao, B. Bhaskara and Tamazian, Artur and Singh, Rup and Vadlamannati, Krishna Chaitanya (2008): Financial developments and the rate of growth of output: An alternative approach.

Abstract

This paper uses a new specification and approach to estimate the effects of financial developments on the steady state rate of growth of output in India, Malaysia, Korea, Thailand and the Philippines for the period 1970 to 2006. These growth effects, though small, are found to be significant except for the Philippines. The trend rate of growth of total factor productivity (TFP), which is due to the omitted but trended variables, is the highest for Malaysia and moderate for India and Thailand. However, TFP is insignificant or negative in the Philippines and Korea.

• Item Type: MPRA Paper
• Language: English
• Keywords: Growth Rates. Financial developments, Solow Model, Country Specific Steady State
• Subjects: N - Economic History > N0 - General > N01 - Development of the Discipline: Historiographical; Sources and Methods; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O10 - General; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O43 - Institutions and Growth; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets ; Saving and Capital Investment ; Corporate Finance and Governance; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences ; Diffusion Processes

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