Infrastructure Finance and Industrial Takeoff in England
That financial matters did not constrain industrial takeoff in the UK is generally accepted in the historical literature; in contrast, contemporary empirical analyses have found evidence that financial development can be a causal determinant of economic growth. We look to reconcile these findings by concentrating on a particular aspect of industrializing UK where inefficiencies in finance could have had bite: the finance of physical infrastructures. We document the historical record and develop the importance of spatial disaggregation and spillovers in both technological and financial development. We develop a simple model that captures the nature of infrastructure finance within a theory of endogenous growth where financial costs are endogenous. We argue that the conception of the finance-growth nexus as a largely static, aggregative phenomenon misses out a good deal of complexity and we relate that complexity to a number of implications for regulation of both financial systems and the emergence of infrastructures. Copyright (c) 2010 The Ohio State University.
Year of publication: |
2010
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Authors: | TREW, ALEX |
Published in: |
Journal of Money, Credit and Banking. - Blackwell Publishing. - Vol. 42.2010, 6, p. 985-1010
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Publisher: |
Blackwell Publishing |
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