Patrick Honohan2013-07-102013-07-102004-02https://hdl.handle.net/10986/14439The causal link between finance and growth is one of the most striking empirical macroeconomic relationships uncovered in the past decade. As this branch of the literature matures, the focus shifts from growth to other aspects of economic prosperity, and from financial depth to multidimensional measures of financial development. The author reviews the evolution of the literature and contributes by: Showing that financial depth is negatively associated with headcount poverty, even after taking account of mean income and inequality. Illustrating the pitfalls in equating financial development with financial depth. Proposing alternative measures of financial development that, though summary, capture its multidimensional nature.en-USCC BY 3.0 IGOABSOLUTE POVERTYABSOLUTE TERMSAGRICULTUREAVERAGE GROWTHAVERAGE INCOMEBALANCE SHEETSBANK DEPOSITSBANKING SECTORBANKING SYSTEMBANKING SYSTEMSBUSINESS CYCLECAPITAL ACCUMULATIONCAPITAL MARKETSCAUSAL EFFECTCENTRAL BANKCOMMERCIAL BANKSCOMMON LAWCOMPETITIVENESSCOMPOSITE INDICATORCOUNTRY COMPARISONSCOUNTRY DATACREDIT CONSTRAINTSCRISESDEBTDEPENDENT VARIABLEDEVELOPING COUNTRIESDEVELOPMENT RESEARCHDISEQUILIBRIUMDISTRIBUTION OF INCOMEDISTRIBUTION OF WEALTHECONOMETRICSECONOMIC CONDITIONSECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC POLICYECONOMIC STRUCTUREECONOMIC STRUCTURESECONOMIES OF SCALEECONOMISTSEMPIRICAL ANALYSISEMPIRICAL LITERATUREEXCHANGE RATEEXPLANATORY VARIABLESEXPLOITATIONFINANCIAL ASSETSFINANCIAL DEPTHFINANCIAL DEVELOPMENTFINANCIAL INSTITUTIONSFINANCIAL MARKETSFINANCIAL SECTORFINANCIAL SECTORSFINANCIAL SERVICESFINANCIAL STRUCTUREFINANCIAL SYSTEMSFISCAL POLICYFULL EMPLOYMENTGDPGDP PER CAPITAGINI COEFFICIENTGINI INDEXGOVERNANCE VARIABLESGROWTH LITERATUREGROWTH PATHGROWTH PROCESSGROWTH RATEGROWTH RATESGROWTH REGRESSIONSGROWTH THEORYHEADCOUNT POVERTYHUMAN CAPITALINCOME DISTRIBUTIONINCOME GROUPSINCOME INEQUALITYINCOME LEVELINCOME SHAREINCREASING RETURNSINCREASING RETURNS TO SCALEINFLATIONINHERITANCEINSTITUTIONAL VARIABLESINTEREST RATEINTERNATIONAL LEVELSINVESTMENT BANKERSINVOLUNTARY UNEMPLOYMENTLEGAL ORIGINSLIBERTIESLIQUIDITYLIVING STANDARDSLONG-TERM GROWTHM2MACROECONOMIC POLICYMACROECONOMIC STABILIZATIONMARGINAL RETURNSMARKET CAPITALIZATIONMARKET PRICESMEAN INCOMEMONETARY POLICYNARROW BANKINGNATIONAL INCOMENONBANK FINANCIAL INSTITUTIONSOILPER CAPITA INCOMEPOINT ESTIMATEPOLICY RESEARCHPOOR COUNTRIESPOOR HOUSEHOLDSPOVERTY RATESPOVERTY REDUCTIONPRICE CONTROLSPRO- POORPRO-POORPRODUCERSPRODUCTIVITYPROFITABILITYPROPENSITY TO SAVEPUBLIC SECTORPURCHASING POWERRAPID GROWTHREDUCING POVERTYRELATIVE IMPORTANCERELATIVE PRICESREVERSE CAUSALITYRICH COUNTRIESSAVINGSSAVINGS RATIOSECURITIESSTANDARD DEVIATIONSTRUCTURAL CHARACTERISTICSTIME SERIESTRADE OPENNESSUNEMPLOYMENT FINANCIAL DEVELOPMENTFINANCIAL DEPTHSTOCK MARKETSFINANCIAL DEEPNESSHEADCOUNT INDEXPOVERTY MEASURESMEAN INCOMEINEQUALITY MEASURESBOND MARKETSEQUITY MARKETSCOUNTRY CASE STUDIESGOVERNMENT OWNERSHIPREGULATORY FRAMEWORKWorld Bank10.1596/14439