IDEAS home Printed from https://ideas.repec.org/p/rba/rbardp/rdp9213.html
   My bibliography  Save this paper

The Impact of Financial Intermediaries on Resource Allocation and Economic Growth

Author

Listed:
  • Philip Lowe

    (Reserve Bank of Australia)

Abstract

This paper examines the links between economic growth and the nature of a country’s financial system. It is argued that long-run growth has its roots in resource accumulation, and in particular in knowledge accumulation. The financial system plays an important role in influencing both the amount and type of resource accumulation which actually takes place. In particular, financial market regulation distorts the incentives of financial intermediaries which, in turn, distorts the type of resource accumulation that takes place. It is also argued that the size of the gains derived from the development of the financial sector rests heavily on the ability of intermediaries to effectively screen and monitor lending proposals. Finally, the paper explores some of the implications of Australia’s financial market liberalisation.

Suggested Citation

  • Philip Lowe, 1992. "The Impact of Financial Intermediaries on Resource Allocation and Economic Growth," RBA Research Discussion Papers rdp9213, Reserve Bank of Australia.
    • Handle: RePEc:rba:rbardp:rdp9213
    as

    Download full text from publisher

    File URL: https://www.rba.gov.au/publications/rdp/1992/pdf/rdp9213.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Stiglitz, Joseph E, 1989. "Financial Markets and Development," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 5(4), pages 55-68, Winter.
    2. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    3. Douglas W. Diamond, 1984. "Financial Intermediation and Delegated Monitoring," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(3), pages 393-414.
    4. Joseph E. Stiglitz, 1989. "Markets and Development," NBER Working Papers 2961, National Bureau of Economic Research, Inc.
    5. Adrian Blundell-Wignall & Marianne Gizycki, 1992. "Credit Supply and Demand and the Australian Economy," RBA Research Discussion Papers rdp9208, Reserve Bank of Australia.
    6. Collier, Paul & Mayer, Colin, 1989. "Financial Liberalization, Financial Systems, and Economic Growth: The Assessment," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 5(4), pages 1-12, Winter.
    7. Greenwood, Jeremy & Jovanovic, Boyan, 1990. "Financial Development, Growth, and the Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1076-1107, October.
    8. Adrian Blundell-Wignall & Frank Browne, 1991. "Macroeconomic Consequences of Financial Liberalisation: A Summary Report," OECD Economics Department Working Papers 98, OECD Publishing.
    9. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    10. Ben Bernanke & Mark Gertler, 1990. "Financial Fragility and Economic Performance," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(1), pages 87-114.
    11. Philip Lowe & Geoffrey Shuetrim, 1992. "The Evolution of Corporate Financial Structure: 1973–1990," RBA Research Discussion Papers rdp9216, Reserve Bank of Australia.
    12. repec:ucp:bkecon:9780226301532 is not listed on IDEAS
    13. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    14. Greenwald, Bruce C. & Kohn, Meir & Stiglitz, Joseph E., 1990. "Financial market imperfections and productivity growth," Journal of Economic Behavior & Organization, Elsevier, vol. 13(3), pages 321-345, June.
    15. Levine, Ross, 1991. "Stock Markets, Growth, and Tax Policy," Journal of Finance, American Finance Association, vol. 46(4), pages 1445-1465, September.
    16. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    17. Jerome Fahrer & Thomas Rohling, 1992. "Some Tests of Competition in the Australian Housing Loan Market," RBA Research Discussion Papers rdp9202, Reserve Bank of Australia.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Joseph Bisignano, 1999. "Precarious credit equilibria: reflections on the Asian financial crisis," BIS Working Papers 64, Bank for International Settlements.
    2. Adam Cagliarini & Fiona Price, 2017. "Exploring the Link between the Macroeconomic and Financial Cycles," RBA Annual Conference Volume (Discontinued), in: Jonathan Hambur & John Simon (ed.),Monetary Policy and Financial Stability in a World of Low Interest Rates, Reserve Bank of Australia.
    3. Wright, April, 2002. "The impact of competition on the operations of foreign banks in Australia in the post-deregulation period," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 12(4-5), pages 359-375.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Paul Auerbach & Jalal Uddin Siddiki, 2004. "Financial Liberalisation and Economic Development: An Assessment," Journal of Economic Surveys, Wiley Blackwell, vol. 18(3), pages 231-265, July.
    2. Siddiki, Jalal Uddin & Auerbach, Paul, 2000. "Economic development, finance and liberalisation: a survey and some unresolved issues," Economics Discussion Papers 2000-6, School of Economics, Kingston University London.
    3. Zaiter Lahimer, Mahjouba, 2011. "L’impact des entrées de capitaux privés sur la croissance économique dans les pays en développement," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/7670 edited by Sterdyniak, Henri.
    4. Akhand Akhtar Hossain, 2009. "Central Banking and Monetary Policy in the Asia-Pacific," Books, Edward Elgar Publishing, number 12777.
    5. Renelt, David, 1991. "Economic growth : a review of the theoretical and empirical literature," Policy Research Working Paper Series 678, The World Bank.
    6. Levine, Ross, 1990. "Stock markets, growth, and policy," Policy Research Working Paper Series 484, The World Bank.
    7. Patrick Artus, 1995. "Mode de financement de l'investissement et croissance," Revue Économique, Programme National Persée, vol. 46(2), pages 169-194.
    8. Levine, Ross & Zervos, Sara, 1998. "Stock Markets, Banks, and Economic Growth," American Economic Review, American Economic Association, vol. 88(3), pages 537-558, June.
    9. Alessandro Giovannini & Maurizio Iacopetta & Raoul Minetti, 2013. "Financial Markets, Banks, and Growth : Disentangling the links," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(5), pages 105-147.
    10. de la Fuente, Angel & Marin, JoseMaria, 1996. "Innovation, bank monitoring, and endogenous financial development," Journal of Monetary Economics, Elsevier, vol. 38(2), pages 269-301, October.
    11. Levine, Ross & Renelt, David, 1991. "Cross-country studies of growth and policy : methodological, conceptual, and statistical problems," Policy Research Working Paper Series 608, The World Bank.
    12. Ekaterina Ponomareva & Alexandra Bozhechkova & Alexandr Knobel, 2012. "Factors of Economic Growth," Published Papers 172, Gaidar Institute for Economic Policy, revised 2013.
    13. Muhammad Arshad Khan, 2007. "Foreign Direct Investment and Economic Growth : The Role of Domestic Financial Sector," Finance Working Papers 22205, East Asian Bureau of Economic Research.
    14. Philip Lowe & Thomas Rohling, 1993. "Agency Costs, Balance Sheets and the Business Cycle," RBA Research Discussion Papers rdp9311, Reserve Bank of Australia.
    15. Stefano Usai & Marco Vannini, 2005. "Banking structure and regional economic growth: lessons from Italy," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 39(4), pages 691-714, December.
    16. Iris Claus & Veronica Jacobsen & Brock Jera, 2004. "Financial Systems and Economic Growth: An Evaluation Framework for Policy," Treasury Working Paper Series 04/17, New Zealand Treasury.
    17. Felix Eschenbach, 2004. "Finance and Growth: A Survey of the Theoretical and Empirical Literature," Tinbergen Institute Discussion Papers 04-039/2, Tinbergen Institute.
    18. Alali, Walid Y., 2009. "Economic Performance and Institutions: Measuring Technical Efficiency Using SPF Approach," MPRA Paper 114336, University Library of Munich, Germany, revised Aug 2009.
    19. Filiz ERATAŞ-SÖNMEZ & Yağmur SAĞLAM, 2019. "The Relationship between Financial Development and Economic Growth for Developing Countries: Panel Causality Analysis," Sosyoekonomi Journal, Sosyoekonomi Society, issue 27(42).
    20. Ross Levine & Norman Loayza & Thorsten Beck, 2002. "Financial Intermediation and Growth: Causality and Causes," Central Banking, Analysis, and Economic Policies Book Series, in: Leonardo Hernández & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Se (ed.),Banking, Financial Integration, and International Crises, edition 1, volume 3, chapter 2, pages 031-084, Central Bank of Chile.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rba:rbardp:rdp9213. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Paula Drew (email available below). General contact details of provider: https://edirc.repec.org/data/rbagvau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.