The Econometrics of Finance and Growth
This paper reviews different econometric methodologies to assess the relationship between financial development and growth. It illustrates the identification problem, which is at the center of the finance and growth literature, using the example o...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2008/04/9385090/econometrics-finance-growth http://hdl.handle.net/10986/6703 |
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okr-10986-6703 |
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oai_dc |
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Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
| language |
English |
| topic |
ABSENCE OF CREDIT ACCESS TO CREDIT ACCESS TO FINANCE ACCESS TO FINANCIAL SERVICES ACCOUNTING AGGREGATE LEVEL AGRICULTURE AMOUNT OF CREDIT ANNUAL GROWTH ANNUAL GROWTH RATE AUTOREGRESSION AVERAGE GROWTH AVERAGE GROWTH RATE BAD BANKS BANK BRANCH BANK POLICY BANKING CRISIS BANKING INSTITUTIONS BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SYSTEMS BANKS BENCHMARK BIASES BOND BONDS BORROWING BUSINESS CYCLE CAPITAL ACCUMULATION CAPITAL ALLOCATION CASH FLOW CASH HOLDINGS COMPETITIVENESS CONSUMER CREDIT CONSUMPTION EXPENDITURES CORPORATE GOVERNANCE COUNTRY CHARACTERISTICS COUNTRY DATA COUNTRY REGRESSIONS COUNTRY SPECIFIC COVARIANCE MATRIX CREDIT ACCESS CREDIT CONSTRAINED FIRMS CREDIT CONSTRAINTS CREDIT INSTITUTION CREDIT MARKET CREDIT PROGRAM CREDIT PROGRAMS DATA SETS DEMAND FOR MONEY DEPENDENT VARIABLE DEPOSIT DEPOSIT INSURANCE DEREGULATION DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT INDICATORS DEVELOPMENT RESEARCH DISAGGREGATED LEVEL DYNAMIC PANEL EARNINGS ECONOMETRIC MODELS ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC HISTORY ECONOMIC LITERATURE ECONOMIC PERFORMANCE ECONOMIC STATISTICS ECONOMIC STUDIES ECONOMICS ECONOMICS LETTERS EMPIRICAL STUDIES EMPLOYMENT EQUATIONS ENDOGENOUS VARIABLES ERROR TERM ERROR TERMS ESTIMATION TECHNIQUES EXCLUSION EXOGENOUS VARIABLES EXPENDITURES EXPLANATORY VARIABLES EXTERNAL FINANCE EXTERNAL FINANCING FARMERS FEDERAL RESERVE FINANCIAL DEPTH FINANCIAL DEVELOPMENT FINANCIAL FRAGILITY FINANCIAL INFORMATION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIARY FINANCIAL INTERMEDIATION FINANCIAL LIBERALIZATION FINANCIAL MARKETS FINANCIAL OUTREACH FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL SECTOR INDICATORS FINANCIAL STRUCTURE FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCING NEED FINANCING NEEDS FINANCING OBSTACLE FINANCING OBSTACLES FIXED EFFECTS GDP PER CAPITA GENDER GNP GROUP LENDING GROWTH EFFECT GROWTH IMPACT GROWTH LITERATURE GROWTH MODELS GROWTH RATE GROWTH RATES GROWTH REGRESSION GROWTH REGRESSIONS HOLDINGS HOUSEHOLD DATA HOUSEHOLD SURVEYS HOUSEHOLD WELFARE HOUSEHOLDS INCOME DISTRIBUTION INCOME INEQUALITY INDIVIDUAL COUNTRIES INDUSTRIALIZATION INDUSTRIALIZED COUNTRIES INEQUALITY INFORMATION ASYMMETRIES INSTITUTIONAL INVESTORS INSTRUMENT INTERNAL FUNDS INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL TRADE INVESTMENT DECISION INVESTMENT DECISIONS INVESTMENT PROJECTS LABOR MARKET LAGGED DEPENDENT LAGGED LEVELS LAGGED VALUES LEGAL CONSTRAINTS LEGAL REFORMS LIQUID ASSETS LIQUIDITY LOAN LONG RUN M2 M3 MACROECONOMIC VARIABLES MARGINAL COST MARGINAL PRODUCT MARKET CONSTRAINTS MARKET DEVELOPMENT MARKET LIQUIDITY MAXIMUM LIKELIHOOD ESTIMATION MICRO-DATA MICRO-ENTERPRISES MICROCREDIT MICRODATA MICROENTERPRISES MICROFINANCE MICROFINANCE INSTITUTIONS MONETARY ECONOMICS NORMAL DISTRIBUTION 0 HYPOTHESIS OPEN ECONOMIES OPTIMAL INVESTMENT OUTREACH PANEL REGRESSIONS PAYMENT SERVICES PER CAPITA GROWTH PHYSICAL CAPITAL POLICY CHANGE POLICY CHANGES POLICY INTERVENTIONS POLICY REFORMS POLICY RESEARCH POLICY VARIABLES POLITICAL ECONOMY POOR HOUSEHOLDS POVERTY LEVELS PRIVATE CREDIT PRODUCTIVITY GROWTH PROPERTY RIGHTS REAL GDP REINVESTMENT RELATIVE IMPORTANCE RESOURCE ALLOCATION RETURNS SALES GROWTH SAVINGS SECURITIES SERIAL CORRELATION SHORT-TERM BORROWING SIGNIFICANT CORRELATION SIGNIFICANT EFFECT SMALL ENTERPRISES STANDARD DEVIATION STATISTICAL ANALYSIS STOCK MARKET STOCK MARKET DEVELOPMENT STOCK MARKETS SUPPLY CURVE TRADE CREDIT TRADE OPENNESS TRANSACTION TRANSACTION COSTS TURNOVER VALUE ADDED VILLAGE VILLAGES |
| spellingShingle |
ABSENCE OF CREDIT ACCESS TO CREDIT ACCESS TO FINANCE ACCESS TO FINANCIAL SERVICES ACCOUNTING AGGREGATE LEVEL AGRICULTURE AMOUNT OF CREDIT ANNUAL GROWTH ANNUAL GROWTH RATE AUTOREGRESSION AVERAGE GROWTH AVERAGE GROWTH RATE BAD BANKS BANK BRANCH BANK POLICY BANKING CRISIS BANKING INSTITUTIONS BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SYSTEMS BANKS BENCHMARK BIASES BOND BONDS BORROWING BUSINESS CYCLE CAPITAL ACCUMULATION CAPITAL ALLOCATION CASH FLOW CASH HOLDINGS COMPETITIVENESS CONSUMER CREDIT CONSUMPTION EXPENDITURES CORPORATE GOVERNANCE COUNTRY CHARACTERISTICS COUNTRY DATA COUNTRY REGRESSIONS COUNTRY SPECIFIC COVARIANCE MATRIX CREDIT ACCESS CREDIT CONSTRAINED FIRMS CREDIT CONSTRAINTS CREDIT INSTITUTION CREDIT MARKET CREDIT PROGRAM CREDIT PROGRAMS DATA SETS DEMAND FOR MONEY DEPENDENT VARIABLE DEPOSIT DEPOSIT INSURANCE DEREGULATION DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT INDICATORS DEVELOPMENT RESEARCH DISAGGREGATED LEVEL DYNAMIC PANEL EARNINGS ECONOMETRIC MODELS ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC HISTORY ECONOMIC LITERATURE ECONOMIC PERFORMANCE ECONOMIC STATISTICS ECONOMIC STUDIES ECONOMICS ECONOMICS LETTERS EMPIRICAL STUDIES EMPLOYMENT EQUATIONS ENDOGENOUS VARIABLES ERROR TERM ERROR TERMS ESTIMATION TECHNIQUES EXCLUSION EXOGENOUS VARIABLES EXPENDITURES EXPLANATORY VARIABLES EXTERNAL FINANCE EXTERNAL FINANCING FARMERS FEDERAL RESERVE FINANCIAL DEPTH FINANCIAL DEVELOPMENT FINANCIAL FRAGILITY FINANCIAL INFORMATION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIARY FINANCIAL INTERMEDIATION FINANCIAL LIBERALIZATION FINANCIAL MARKETS FINANCIAL OUTREACH FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL SECTOR INDICATORS FINANCIAL STRUCTURE FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCING NEED FINANCING NEEDS FINANCING OBSTACLE FINANCING OBSTACLES FIXED EFFECTS GDP PER CAPITA GENDER GNP GROUP LENDING GROWTH EFFECT GROWTH IMPACT GROWTH LITERATURE GROWTH MODELS GROWTH RATE GROWTH RATES GROWTH REGRESSION GROWTH REGRESSIONS HOLDINGS HOUSEHOLD DATA HOUSEHOLD SURVEYS HOUSEHOLD WELFARE HOUSEHOLDS INCOME DISTRIBUTION INCOME INEQUALITY INDIVIDUAL COUNTRIES INDUSTRIALIZATION INDUSTRIALIZED COUNTRIES INEQUALITY INFORMATION ASYMMETRIES INSTITUTIONAL INVESTORS INSTRUMENT INTERNAL FUNDS INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL TRADE INVESTMENT DECISION INVESTMENT DECISIONS INVESTMENT PROJECTS LABOR MARKET LAGGED DEPENDENT LAGGED LEVELS LAGGED VALUES LEGAL CONSTRAINTS LEGAL REFORMS LIQUID ASSETS LIQUIDITY LOAN LONG RUN M2 M3 MACROECONOMIC VARIABLES MARGINAL COST MARGINAL PRODUCT MARKET CONSTRAINTS MARKET DEVELOPMENT MARKET LIQUIDITY MAXIMUM LIKELIHOOD ESTIMATION MICRO-DATA MICRO-ENTERPRISES MICROCREDIT MICRODATA MICROENTERPRISES MICROFINANCE MICROFINANCE INSTITUTIONS MONETARY ECONOMICS NORMAL DISTRIBUTION 0 HYPOTHESIS OPEN ECONOMIES OPTIMAL INVESTMENT OUTREACH PANEL REGRESSIONS PAYMENT SERVICES PER CAPITA GROWTH PHYSICAL CAPITAL POLICY CHANGE POLICY CHANGES POLICY INTERVENTIONS POLICY REFORMS POLICY RESEARCH POLICY VARIABLES POLITICAL ECONOMY POOR HOUSEHOLDS POVERTY LEVELS PRIVATE CREDIT PRODUCTIVITY GROWTH PROPERTY RIGHTS REAL GDP REINVESTMENT RELATIVE IMPORTANCE RESOURCE ALLOCATION RETURNS SALES GROWTH SAVINGS SECURITIES SERIAL CORRELATION SHORT-TERM BORROWING SIGNIFICANT CORRELATION SIGNIFICANT EFFECT SMALL ENTERPRISES STANDARD DEVIATION STATISTICAL ANALYSIS STOCK MARKET STOCK MARKET DEVELOPMENT STOCK MARKETS SUPPLY CURVE TRADE CREDIT TRADE OPENNESS TRANSACTION TRANSACTION COSTS TURNOVER VALUE ADDED VILLAGE VILLAGES Beck, Thorsten The Econometrics of Finance and Growth |
| relation |
Policy Research Working Paper No. 4608 |
| description |
This paper reviews different econometric
methodologies to assess the relationship between financial
development and growth. It illustrates the identification
problem, which is at the center of the finance and growth
literature, using the example of a simple Ordinary Least
Squares estimation. It discusses cross-sectional and panel
instrumental variable approaches to overcome the
identification problem. It presents the time-series
approach, which focuses on the forecast capacity of
financial development for future growth rates, and
differences-in-differences techniques that try to overcome
the identification problem by assessing the differential
effect of financial sector development across states with
different policies or across industries with different needs
for external finance. Finally, it discusses firm-level and
household approaches that allow analysts to dig deeper into
the channels and mechanisms through which financial
development enhances growth and welfare, but pose their own
methodological challenges. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Beck, Thorsten |
| author_facet |
Beck, Thorsten |
| author_sort |
Beck, Thorsten |
| title |
The Econometrics of Finance and Growth |
| title_short |
The Econometrics of Finance and Growth |
| title_full |
The Econometrics of Finance and Growth |
| title_fullStr |
The Econometrics of Finance and Growth |
| title_full_unstemmed |
The Econometrics of Finance and Growth |
| title_sort |
econometrics of finance and growth |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2008/04/9385090/econometrics-finance-growth http://hdl.handle.net/10986/6703 |
| _version_ |
1764400710414237696 |
| spelling |
okr-10986-67032021-04-23T14:02:31Z The Econometrics of Finance and Growth Beck, Thorsten ABSENCE OF CREDIT ACCESS TO CREDIT ACCESS TO FINANCE ACCESS TO FINANCIAL SERVICES ACCOUNTING AGGREGATE LEVEL AGRICULTURE AMOUNT OF CREDIT ANNUAL GROWTH ANNUAL GROWTH RATE AUTOREGRESSION AVERAGE GROWTH AVERAGE GROWTH RATE BAD BANKS BANK BRANCH BANK POLICY BANKING CRISIS BANKING INSTITUTIONS BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SYSTEMS BANKS BENCHMARK BIASES BOND BONDS BORROWING BUSINESS CYCLE CAPITAL ACCUMULATION CAPITAL ALLOCATION CASH FLOW CASH HOLDINGS COMPETITIVENESS CONSUMER CREDIT CONSUMPTION EXPENDITURES CORPORATE GOVERNANCE COUNTRY CHARACTERISTICS COUNTRY DATA COUNTRY REGRESSIONS COUNTRY SPECIFIC COVARIANCE MATRIX CREDIT ACCESS CREDIT CONSTRAINED FIRMS CREDIT CONSTRAINTS CREDIT INSTITUTION CREDIT MARKET CREDIT PROGRAM CREDIT PROGRAMS DATA SETS DEMAND FOR MONEY DEPENDENT VARIABLE DEPOSIT DEPOSIT INSURANCE DEREGULATION DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT INDICATORS DEVELOPMENT RESEARCH DISAGGREGATED LEVEL DYNAMIC PANEL EARNINGS ECONOMETRIC MODELS ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC HISTORY ECONOMIC LITERATURE ECONOMIC PERFORMANCE ECONOMIC STATISTICS ECONOMIC STUDIES ECONOMICS ECONOMICS LETTERS EMPIRICAL STUDIES EMPLOYMENT EQUATIONS ENDOGENOUS VARIABLES ERROR TERM ERROR TERMS ESTIMATION TECHNIQUES EXCLUSION EXOGENOUS VARIABLES EXPENDITURES EXPLANATORY VARIABLES EXTERNAL FINANCE EXTERNAL FINANCING FARMERS FEDERAL RESERVE FINANCIAL DEPTH FINANCIAL DEVELOPMENT FINANCIAL FRAGILITY FINANCIAL INFORMATION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIARY FINANCIAL INTERMEDIATION FINANCIAL LIBERALIZATION FINANCIAL MARKETS FINANCIAL OUTREACH FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL SECTOR INDICATORS FINANCIAL STRUCTURE FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCING NEED FINANCING NEEDS FINANCING OBSTACLE FINANCING OBSTACLES FIXED EFFECTS GDP PER CAPITA GENDER GNP GROUP LENDING GROWTH EFFECT GROWTH IMPACT GROWTH LITERATURE GROWTH MODELS GROWTH RATE GROWTH RATES GROWTH REGRESSION GROWTH REGRESSIONS HOLDINGS HOUSEHOLD DATA HOUSEHOLD SURVEYS HOUSEHOLD WELFARE HOUSEHOLDS INCOME DISTRIBUTION INCOME INEQUALITY INDIVIDUAL COUNTRIES INDUSTRIALIZATION INDUSTRIALIZED COUNTRIES INEQUALITY INFORMATION ASYMMETRIES INSTITUTIONAL INVESTORS INSTRUMENT INTERNAL FUNDS INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL TRADE INVESTMENT DECISION INVESTMENT DECISIONS INVESTMENT PROJECTS LABOR MARKET LAGGED DEPENDENT LAGGED LEVELS LAGGED VALUES LEGAL CONSTRAINTS LEGAL REFORMS LIQUID ASSETS LIQUIDITY LOAN LONG RUN M2 M3 MACROECONOMIC VARIABLES MARGINAL COST MARGINAL PRODUCT MARKET CONSTRAINTS MARKET DEVELOPMENT MARKET LIQUIDITY MAXIMUM LIKELIHOOD ESTIMATION MICRO-DATA MICRO-ENTERPRISES MICROCREDIT MICRODATA MICROENTERPRISES MICROFINANCE MICROFINANCE INSTITUTIONS MONETARY ECONOMICS NORMAL DISTRIBUTION 0 HYPOTHESIS OPEN ECONOMIES OPTIMAL INVESTMENT OUTREACH PANEL REGRESSIONS PAYMENT SERVICES PER CAPITA GROWTH PHYSICAL CAPITAL POLICY CHANGE POLICY CHANGES POLICY INTERVENTIONS POLICY REFORMS POLICY RESEARCH POLICY VARIABLES POLITICAL ECONOMY POOR HOUSEHOLDS POVERTY LEVELS PRIVATE CREDIT PRODUCTIVITY GROWTH PROPERTY RIGHTS REAL GDP REINVESTMENT RELATIVE IMPORTANCE RESOURCE ALLOCATION RETURNS SALES GROWTH SAVINGS SECURITIES SERIAL CORRELATION SHORT-TERM BORROWING SIGNIFICANT CORRELATION SIGNIFICANT EFFECT SMALL ENTERPRISES STANDARD DEVIATION STATISTICAL ANALYSIS STOCK MARKET STOCK MARKET DEVELOPMENT STOCK MARKETS SUPPLY CURVE TRADE CREDIT TRADE OPENNESS TRANSACTION TRANSACTION COSTS TURNOVER VALUE ADDED VILLAGE VILLAGES This paper reviews different econometric methodologies to assess the relationship between financial development and growth. It illustrates the identification problem, which is at the center of the finance and growth literature, using the example of a simple Ordinary Least Squares estimation. It discusses cross-sectional and panel instrumental variable approaches to overcome the identification problem. It presents the time-series approach, which focuses on the forecast capacity of financial development for future growth rates, and differences-in-differences techniques that try to overcome the identification problem by assessing the differential effect of financial sector development across states with different policies or across industries with different needs for external finance. Finally, it discusses firm-level and household approaches that allow analysts to dig deeper into the channels and mechanisms through which financial development enhances growth and welfare, but pose their own methodological challenges. 2012-05-30T19:50:42Z 2012-05-30T19:50:42Z 2008-04 http://documents.worldbank.org/curated/en/2008/04/9385090/econometrics-finance-growth http://hdl.handle.net/10986/6703 English Policy Research Working Paper No. 4608 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |