Financial intermediation and economic growth in east Asian countries.

摘要

Economists differ on their views regarding the importance of financial system for economic growth. This dissertation presents a study of the possible relationship between financial intermediation and long run growth. The first part focuses on the contribution of economists regarding the relationship between financial intermediation and economic growth. The second part tries to determine if macroeconomic theory can support the idea that financial intermediation affects long run economic growth. It has been found that when including the acquisition of commercial and technical knowledge in the production function to generate long-term growth endogenously, financial intermediation becomes important to economic growth. This production process has a Solow model concept modified by the term that involves financial services, where any increase in financial services relative to GDP leads to increase in GDP. In order for the production process to be completed, long and short-term capital must be financed. Financial intermediaries provide the means to do so. Once that happens, financial intermediation enters the production function. The growth rate will be correlated positively as long as the marginal rate of return from financial intermediation exceeds the rate of time preference. This implies that a more efficient financial system will provide “better” financial services which will enable economy to increase its real GDP growth rate.; The third chapter examines the empirical relationship between financial intermediation and economic growth in Southeast Asian countries (SEACs). Three methods are used to assess the long-run impact of financial intermediation on economic growth in these countries. The findings of the panel data are supportive of the theoretical view that financial development is positively correlated with the growth rate of real per capita GDP. More specifically, the test of causality shows that financial intermediation affects the growth rate rather than the growth rate affecting intermediation. The individual data analysis suggests a similar result except in Thailand whose financial system is lacking.