Finance and Growth
What is the role of a financial system? What is the evidence on the relationship between financial development and development?
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Is there a discussion the impact of debt on development and whether debt relief (particularly of African countries) would be effective in promoting growth in poor countries? Or was this in discussed in the foreign aid section and I've forgotten?
I'm asking out of interest, not arguing a position.
In these studies on financial development, did they adjust for other factors increasing growth. Labour force expansion and other low hanging fruits. Might be that the added growth due to financial development might have been part of the bubble side of the wealth creation. I think these are valid questions. Did the studies control for those factors or did they jump to their preferred conclusion?
I can understand that banks can bridge the gap, but we know that this was always just one part of a bank's strategy, nowadays even more so than before the crisis.