Financial Development and Economic Growth: An Economic Analysis for Singapore

Author/Editor:

Lamin Y Leigh

Publication Date:

March 1, 1996

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

With the emergence of the rapidly expanding literature on endogenous growth, the relationship between financial development and economic growth has received a new source of inspiration. Recent cointegration techniques that focus on the estimation and the identification of long-run economic relationship(s) between data variables are particularly appropriate to the study of long run endogenous growth models. This paper has applied these techniques to the Singapore data using a supply-side framework. By and large, the econometric analysis in this paper has yielded results that are in line with predictions of endogenous growth models. In particular, we find that financial development positively affects both transitional and long-run growth in Singapore.

Series:

Working Paper No. 1996/015

Subject:

Balance of payments Financial markets Financial sector development Foreign direct investment Human capital Labor Production Total factor productivity

English

Publication Date:

March 1, 1996

ISBN/ISSN:

9781451843217/1018-5941

Stock No:

WPIEA0151996

Pages:

58

Please address any questions about this title to publications@imf.org