Financial Systems, Economic Growth, and Globalization

Peter L. Rousseau and Richard Sylla

in Globalization in Historical Perspective

Published by University of Chicago Press

Published in print August 2003 | ISBN: 9780226065984
Published online February 2013 | e-ISBN: 9780226065991 | DOI:
Financial Systems, Economic Growth, and Globalization

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This chapter, which explores the links between domestic financial development, domestic growth, and international financial market integration, begins with a discussion of the meaning of a good or well-functioning financial system. Next, it develops several historical case studies of countries that built such systems early in their modern economic histories: the Netherlands, Great Britain, the United States, France, Germany, and Japan. For each case, the chapter considers when and how a modern financial system emerged, how it contributed to economic growth, and what relationship it had to the country's participation in international finance. With some lessons of financial history drawn from the cases in mind, it investigates the finance–growth nexus, and the finance–growth–globalization nexus. After discussing data sources and methodological considerations, econometric results and conclusions are presented. A commentary is also included at the end of the chapter.

Keywords: financial development; domestic growth; financial market integration; financial system

Chapter.  18963 words.  Illustrated.

Subjects: Economic History

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