Financialization and Its Effects on Economic Growth: Hobbled by Deregulation?
Item
Title
Financialization and Its Effects on Economic Growth: Hobbled by Deregulation?
Description
In the aftermath of the unprecedented global financial collapse in 2008, the public remains skeptical of financial institutions. Much of the lead-up to this crisis has its roots in the steady expansion of the financial sector in highly-developed economies. This transformation has seemingly permanently shifted the economic landscape of nonfinancial businesses towards unproductive financial investments. Using macroeconomic data for 217 countries, this study tests the hypothesis that financial development has a negative effect on average GDP growth post-2008 by employing OLS regression estimation. While controlling for additional influences on growth such as education, inflation, private investment, and government expenditure, the study's preliminary results indicate that the rise of finance has impaired growth. Further testing utilizes OECD country data in a time-series model measuring financialization over the period between 1980-2015. Extracting from these models the estimated effect of financialization will help guide policy concerning the regulation of the financial sector.
Armagan Gezici
Contributor
Keene State College
Creator
Ryan S. Sullivan
Date
2017-10-11
Identifier
http://hdl.handle.net/20.500.12088/8076
Subject
Economics
Type
Presentation
Rights
http://rightsstatements.org/vocab/InC/1.0/