GOVERNMENT FINANCIAL REGULATION AND GROWTH

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Salvador Rivas Aceves
Chiara Amato

Abstract

The effects of financial system on economic growth rate are identified. To do this in an endogenous stochastic growth model with two types of financial systems, efficient and inefficient ones, the effects on growth are studied. This investigation shows that financial inefficiency has a negative impact on growth. A financial regulation through a capital yield tax corrects negative impacts on growth; furthermore, the necessary conditions for growing under this scenario are characterized. An empirical study is carried out in order to verify the relationship between economic growth and financial regulations.

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How to Cite
Rivas Aceves, S., & Amato, C. (2017). GOVERNMENT FINANCIAL REGULATION AND GROWTH. Investigación Económica, 76(299), 51–86. https://doi.org/10.1016/j.inveco.2016.09.001