Financial Development and Economic Growth: An Overview

24 Pages Posted: 14 Feb 2006

See all articles by Mohsin S. Khan

Mohsin S. Khan

International Monetary Fund (IMF)

Abdelhak Senhadji

International Monetary Fund (IMF) - Asia and Pacific Department

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Date Written: December 2000

Abstract

In recent years there has been substantial theoretical and empirical work on the role that financial markets play in fostering economic growth and development. This paper provides a selective review of the literature, as well as new empirical evidence on the relationship between financial development and economic growth for a large cross-section sample of countries. While the results indicate that the effect of financial development on growth is positive, the size of the effect varies with different indicators of financial development, estimation method, data frequency, and the functional form of the relationship.

Keywords: financial development, financial markets, growth

JEL Classification: O16, O40, G10

Suggested Citation

Khan, Mohsin S. and Senhadji, Abdelhak, Financial Development and Economic Growth: An Overview (December 2000). IMF Working Paper No. 00/209, Available at SSRN: https://ssrn.com/abstract=880870

Mohsin S. Khan (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-4518 (Phone)
202-623-6440 (Fax)

Abdelhak Senhadji

International Monetary Fund (IMF) - Asia and Pacific Department ( email )

700 19th Street NW
Washington, DC 20431
United States

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