Even before the financial crisis of 2007/08, there were significant questions about Europe's long-term growth prospects. After a long period of catching up with US levels of labour productivity, euro area productivity growth had, from the mid-1990s onwards, fallen significantly behind. Using...

An influential strand of literature starting with the Nobel Prize winning work of Oliver Williamson (1971, 1975) argues that a rational agent underinvests in relationship-specific assets due to the possibility of an opportunistic behaviour on the part of her contractual partner. We first combine...

This paper examines whether there is a threshold above which financial development no longer has a positive effect on economic growth. We use different empirical approaches to show that there can indeed be "too much" finance. In particular, our results suggest that finance starts having a...

Financial market frictions distort the allocation of resources among productive units-all else equal, firms whose financing choices are affected by financial frictions face higher borrowing costs than firms with ready access to capital markets. As a result, input choices may differ...

The need for transition to indefinitely sustainable macro economic production functions and the attendant required evolution of modern portfolio theory are discussed. A new, 'next economy' methodology is proposed to practically apply modern realities to portfolios in meaningful ways. Existing...

Financial Inclusion is a state where financial services are delivered by a range of providers, mostly the private sector, to reach everyone who could use them. Specifically, it means a financial system that serves as many people as possible in a country. In recent time, financial Inclusion has...

Recent literature has established a positive correlation between financial development and economic growth. While papers such as Bencivenga, Smith and Starr (1995) identify potential nonlinearities in this relationship, empirical research to date has allowed for only linear relationships. This...

The aim of this paper is to investigate the effects of technological change on stock market dynamics. We develop an intertemporal optimising model, the central innovation of which is the distinction between the non-perishables and perishables sectors. We discuss the conditions likely to lead to...

We present a survey of the finance-growth nexus that raises a number of qualifications to the mainstream interpretation. Doubts regarding empirical consensus are investigated and we consider the prevalence of cross-section econometrics as dominant in shaping the present theoretical consensus. To...

This paper studies the effects of stock market valuation on research investment, the rate of innovation and welfare. In the presence of financing constraints for Ramp;D investment, episodes of high market valuation can ease these constraints and raise the economy-wide investment in Ramp;D and...