Indicators of Financial Development
Posted: 23 Jan 2007
Finance long has been described as the "governor" of economic development. Yet there are no agreed indicators of financial development or measures of the efficiency with which finance provides services to other sectors. This paper clarifies the choices by distinguishing price from quantity indicators of financial development. It recommends increased use of measures of spread between the required rate of return on productive investment and the rate of return on intermediated savings as soon as such data can be obtained from liberalized financial markets. For concreteness, data references are made to Mexico and Chile.
Keywords: financial development, indicators, liberalization, Mexico, Chile
JEL Classification: G15, G18
Suggested Citation: Suggested Citation