Financial system and economic growth: the korean experience

摘要

This paper examines the relationship between the development of financial systems and economic growth using Korea as a case study. In particular, we focus on the relative development of financial intermediariesand capital markets, and their impact on the portfolio behavior of the household and business sectors. Causality and non-nested model selection tests show that financial development in general leads economic growth and that financial intermediaries are more important than capital markets in this relationship.