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DeVELOPPEMENT FINANCIER, QUALITe INSTITUTIONNELLE ET CROISSANCE : UN MODeLE SIMPLE AVEC EFFETS DE SEUIL

Author

Listed:
  • Alexandru MINEA

    (CERDI, Universite d’Auvergne)

  • Patrick VILLIEU

    (LEO, Universite d’Orleans)

Abstract

Dans les analyses empiriques, la « qualite institutionnelle » semble etre une variable determinante pour etablir le sens de la relation entre finance et croissance. Ainsi, Demetriades et Law (2004) montrent que le developpement financier exerce un effet favorable sur la croissance lorsque les institutions sont saines, alors que cette correlation disparaît si les institutions sont alterees. Dans cet article, nous tentons de reproduire ce fait saillant dans un modele de croissance endogene. Dans notre modele, lorsque la qualite institutionnelle depasse un certain seuil, la relation entre finance et croissance est positive, alors qu’en decà du seuil, elle devient negative. Ce resultat s’explique de la maniere suivante : le developpement financier abaisse les coûts de transaction sur l’investissement prive, mais reduit egalement les recettes de seigneuriage utilisables pour les investissements publics. Par consequent, il est favorable à la croissance seulement si d’autres recettes publiques peuvent etre utilisees pour financer les investissements publics, donc si la qualite institutionnelle est suffisante pour permettre de collecter des impots autrement que par taxe inflationniste. Au contraire, si la qualite institutionnelle est trop faible, la perte de recettes de seigneuriage ne peut etre compensee par la collecte de nouveaux impots, et les infrastructures necessaires au developpement ne peuvent etre programmees. Abstract - Empirical studies outline the importance of the “institutional quality” in the relation between finance and growth. Demetriades and Law (2004) show that financial development has a positive effect on economic growth when institutions are “sound”, while this correlation disappears if institutions are “poor”. The goal of this paper is to reproduce this result in an endogenous growth model. In our setup, when institutional quality exceeds a certain threshold, the relation between finance and growth is positive, while negative below. This result may be explained by the fact that financial development weakens transaction costs on private investment, but also reduces seigniorage resources for public investment. Consequently, financial develop-ment is growth-enhancing if other resources may be used to finance public investment, namely if the institutional quality is sufficient to allow for collecting public resources other than inflation tax. Conversely, in case of poor institutional quality, the loss of seigniorage revenues cannot be compensated by collecting new taxes, and development-enhancing infrastructures cannot be carried out.

Suggested Citation

  • Alexandru MINEA & Patrick VILLIEU, 2010. "DeVELOPPEMENT FINANCIER, QUALITe INSTITUTIONNELLE ET CROISSANCE : UN MODeLE SIMPLE AVEC EFFETS DE SEUIL," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 32, pages 31-58.
    • Handle: RePEc:tou:journl:v:32:y:2010:p:31-58
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    References listed on IDEAS

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    3. Magloire LANHA, 2022. "Les institutions influencent-elles la relation," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 55, pages 5-22.

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    More about this item

    Keywords

    CROISSANCE ENDOGeNE; EFFETS DE SEUIL; POLITIQUE MONeTAIRE; DeVELOPPEMENT FINANCIER; POLITIQUE FISCALE; INSTITUTIONS;
    All these keywords.

    JEL classification:

    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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