Publication: What Type of Finance Matters for Growth?: Bayesian Model Averaging Evidence
Date
2016-04
ISSN
Published
2016-04
Author(s)
Hasan, Iftekhar
Horvath, Roman
Mares, Jan
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. http://hdl.handle.net/10986/24219 License: CC BY 3.0 IGO.”
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