World Banking Abstracts, vol. 35, no. 1, 2018, Page 62
G PRINCIPLES AND METHODS
How can emerging markets be brought up to speed?
Banker, The (UK), vol. 168, no. 1103 (December 2017), pp. 42-44
Capital markets have an important role to play in helping emerging market economies to advance but despite this, capital markets
in developing countries continue to lag behind those in more developed jurisdictions. Seven experts in this field participated in a
round table discussion at an International Finance Corporation conference to explore strategies for making progress in this area.
More specifically, they consider the role that can be played by multilateral development banks, commercial banks and regulators.
In addition, they consider possibilities involving green bonds, the potential to build capacity and they question why it is that
progress to date has been so disappointingly slow.
Finance, investment and growth: evidence for Italy
Banca d'Italia Economic Bulletin, vol. 47, no. 1 (February 2018), pp. 145-85
Aggregate indicators of financial depth in Italy are studied over the period 1965-2009 in a bid to better understand the finance-
growth nexus. Having controlled for the main determinants of growth, it is found that aggregate indicators of financial depth do not
have a significant bearing on economic growth. Indeed, the ratio of private credit-to-GDP is inversely related to growth over the
entire study period. However, financial development that stimulates an increase in the real rate of investment does have a positive
effect on economic growth. (5 tables, 8 figures, references)
Financial development and economic growth nexus: a revisionist approach
Nyasha, S. and Odhiambo, N.M.
Banca d'Italia Economic Bulletin, vol. 47, no. 1 (February 2018), pp. 223-29
The relationship between financial development and economic growth is highly complex and this paper explores the nature of the
relationship from both theoretical and empirical fronts. Several controversies regarding how financial development is related to
economic growth are explored and it is concluded that the finance-growth nexus is dependent on a variety of factors such as the
choice of data, methodology, country of study and the proxies selected to infer financial development. As such, it is unwise to
assume that financial development can be relied upon to deliver economic growth. (References)
Capital misallocation and financial development: a sector-level analysis
Marconi, D. and Upper, C.
Bank for International Settlements Working Papers, no. 671 (November 2017), pp. 1-30
The effect that a country’s financial development has on industry-level capital allocation is examined for a sample of six countries
at varying stages of development (China, India, Japan, Korea, Mexico and the US). Wedges for capital and labour inputs are
estimated for 26 industrial sectors in each country and their sum total is used to infer the extent of capital and labour misallocation
at the national level. Capital is allocated to profitable investment opportunities more efficiently in countries that have developed
financial systems. Moreover, the benefits of financial development are realised most keenly by industries requiring high levels of
research and development expenditure or capital investment. (9 tables, 2 figures, references)