We study the effect of financial markets on "optimal" diversification defined in the spirit of mean-variance efficiency … as a pattern of output reallocation across industrial sectors which simultaneously accounts for the sectors' growth …, volatility, and correlations. Our findings imply that financial markets increase substantially the speed with which the observed …

The choice of instruments for mitigating economic volatility is a serious consideration for policymakers and important … markets are more effective than conventional economic policies, such as fiscal interventions, in reducing economic volatility …

More financially developed countries show lower volatility of industrial output. Volatility is particularly reduced in … industries that are more financially dependent. Most of the reduction is in idiosyncratic volatility. Systematic volatility is …

This paper investigates whether volatility of financial development plays a role in determining industrial growth … volatility on industrial volatility mainly works through the increase in fluctuations of the growth of real value added per firm … stock market positively associate with higher industrial growth volatility, which contrasts sharply with the finding in the …

economic growth. It starts with the pioneers in this field and then classifies two main schools favouring liberal financial … literature on financial development and endogenous growth pushed the discussion back into the direction initially advocated by … financial development and economic growth. The evidence suggests, however, enormous heterogeneity across countries, regions …

major determinant of economic growth and productivity (Levine, Loayza and Beck 2000). Typically, paradigms are based on … that financial development and credit booms might not only support growth but jeopardize the whole economic system. While … there exists a huge literature on the finance growth nexus before the international financial crisis analyses on post …