Working Paper
What Type of Finance Matters for Growth? : Bayesian Model Averaging Evidence

Published
2016-04
Metadata
Abstract
This paper examines the effect of finance on long-term economic growth using Bayesian model averaging to address model uncertainty in cross-country growth regressions. The literature largely focuses on financial indicators that assess the financial depth of banks and stock markets. These indicators are examined jointly with newly developed indicators that assess the stability and efficiency of financial markets. Once the finance-growth regressions are subjected to model uncertainty,the results suggest that commonly used indicators of financial development are not robustly related to long-term growth. However, the findings from the global sample indicate that one newly developed indicator -- the efficiency of financial intermediaries -- is robustly related to long-term growth.Citation
“Hasan, Iftekhar; Horvath, Roman; Mares, Jan. 2016. What Type of Finance Matters for Growth? : Bayesian Model Averaging Evidence. Policy Research Working Paper;No. 7645. World Bank, Washington, DC. © World Bank. https://openknowledge.worldbank.org/handle/10986/24219 License: CC BY 3.0 IGO.”
Users also downloaded
-
-
-
Related items
Showing items related by title, author, creator and subject.
-
-
-
Follow World Bank Publications on Facebook, Twitter or Linked-In