Financial Development and Economic Growth Nexus: A Revisionist Approach

7 Pages Posted: 5 Jan 2018

See all articles by Sheilla Nyasha

Sheilla Nyasha

University of South Africa

Nicholas M. Odhiambo

University of South Africa

Date Written: February 2018

Abstract

In this piece, we highlight some of the salient issues and controversies surrounding the relationship between financial development and economic growth, from both the theoretical and the empirical fronts. We first discuss the controversies on the role of financial development in economic growth; and we then proceed to review the causal relationship between financial development and economic growth. We conclude that the relationship between financial development and economic growth is highly complex, and is dependent on a number of factors. Hence, the argument that financial development always leads to economic growth should be taken with extreme caution.

Suggested Citation

Nyasha, Sheilla and Odhiambo, Nicholas M., Financial Development and Economic Growth Nexus: A Revisionist Approach (February 2018). Economic Notes, Vol. 47, Issue 1, pp. 223-229, 2018. Available at SSRN: https://ssrn.com/abstract=3096788 or http://dx.doi.org/10.1111/ecno.12101

Sheilla Nyasha (Contact Author)

University of South Africa ( email )

P.O. Box 392
UNISA
Pretoria, Gauteng 0003
South Africa

Nicholas M. Odhiambo

University of South Africa

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