Indicators of Financial Development

Posted: 23 Jan 2007

See all articles by George M. von Furstenberg

George M. von Furstenberg

Indiana University

Michele U. Fratianni

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy; Universita' Politecnica delle Marche


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

von Furstenberg, George M. and Fratianni, Michele, Indicators of Financial Development. North-American Journal of Economics and Finance, Vol. 7, No. 1, pp. 19-29, 1996. Available at SSRN:

George M. Von Furstenberg

Indiana University ( email )

Department of Economics
Wylie Hall, Indiana University
Bloomington, IN 47405-6620
United States
812-856-1382 (Phone)
812-855-3736 (Fax)


Michele Fratianni (Contact Author)

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy ( email )

Bloomington, IN 47405
United States
812-855-3360 (Phone)
812-855-3354 (Fax)

Universita' Politecnica delle Marche ( email )

Piazzale Martelli, 8
60121 Ancona
39-071-2207120 (Phone)

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