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Economic Growth and Financial Institutions: Influence on Macro- and Micro-levels

Author

Listed:
  • Oleg S. Sukharev

    (Institute of Economics, Russian Academy of Sciences, Moscow 117218, Russia)

Abstract

The problem of the influence of the resource allocation structure, in particular, financial resources, the size of the money supply on economic growth, is investigated in this article. The author obtains theoretical correlations that clarify the possible influence degree of the growth rate of individual sectors and the number of agents on the amount of money necessary for the development, which also demonstrate the importance of the “resource allocation” factor for economic development. The formation of a reasonable financial policy is the determining instrument in organization of the Russian economy growth. A strict theoretical condition on the necessary financial resources is formulated in terms of the third sector appearance in the two-sector model of the economy, and this sector can symbolize the development of innovations. Moreover, the author obtains another correlation for the development of the economic system, with a limited financial resource and makes an assessment of the financial institutions influence on the development of the economic system. Specifically, the article shows such influence at the micro-level, when solving the problem of allocating funding for basic research, where the applied criteria fulfill the role of institutions (rules for allocating financial resources).

Suggested Citation

  • Oleg S. Sukharev, 2017. "Economic Growth and Financial Institutions: Influence on Macro- and Micro-levels," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 2, pages 76-90, April.
    • Handle: RePEc:fru:finjrn:170207:p:76-90
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    More about this item

    Keywords

    economic growth; economic structure; finance; money supply; fiscal policy; the model of R. Mandell;
    All these keywords.

    JEL classification:

    • E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • G01 - Financial Economics - - General - - - Financial Crises
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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