nep-fdg New Economics Papers
on Financial Development and Growth
Issue of 2008‒11‒04
four papers chosen by
Iulia Igescu
Global Insight, GmbH

  1. Bank Account and Savings - The Impact of Remittances and Migration: A Case Study of Moldova By Fernando Rios Avila; Eva Schlarb
  2. Sudden stops, sectoral reallocations, and the real exchange rate By Timothy J. Kehoe; Kim J. Ruhl
  3. Finance et accumulations dans le capitalisme post-industriel By Bernard Paulré
  4. International reserves, growth and effective demand By Peter Kriesler; Moritz Cruz

  1. By: Fernando Rios Avila; Eva Schlarb
    Abstract: In many developing countries, the formal financial sector is underdeveloped and majority of the population does not have access to it. This paper analyzes the empirical link between remittances and financial sector development on a microeconomic level. Using a unique household dataset for Moldova, we find that receiving monetary remittances has a positive and significant effect on the probability of having a bank account, thereby promoting financial sector development. Furthermore, we show that remittances tend to have an even higher positive effect on household savings, which is a sign for a hidden potential for financial sector development.
    Date: 2008–05
  2. By: Timothy J. Kehoe; Kim J. Ruhl
    Abstract: A sudden stop of capital flows into a developing country tends to be followed by a rapid switch from trade deficits to surpluses, a depreciation of the real exchange rate, and decreases in output and total factor productivity. Substantial reallocation takes place from the nontraded sector to the traded sector. We construct a multisector growth model, calibrate it to the Mexican economy, and use it to analyze Mexico's 1994?95 crisis. When subjected to a sudden stop, the model accounts for the trade balance reversal and the real exchange rate depreciation, but it cannot account for the decreases in GDP and TFP. Extending the model to include labor frictions and variable capital utilization, we still find that it cannot quantitatively account for the dynamics of output and productivity without losing the ability to account for the movements of other variables.
    Keywords: Financial crises
    Date: 2008
  3. By: Bernard Paulré (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: The emergence of a knowledge capitalism is often considered as an alternative to a financial capitalism. Our goal is to explain why the financial capitalism hypothesis is not relevant to characterize and to show that the hypothesis of a knowledge capitalism can provide an explanation of the growth and the importance of finance. Three topics are considered:(1) the new forms of accumulation in the knowledge capitalism, (ii) the current financialization and (iii) the co-evolution of finance and knowledge capitalism
    Keywords: Capitalism ; financialisation ; knowledge capitalism ; cognitive capitalism ; finance ; fordism ; postfordim ; rentiers ; accumulation ; immaterial ; intangibles ; society of control
    Date: 2008–01–29
  4. By: Peter Kriesler (School of Economics, The University of New South Wales); Moritz Cruz (Universidad Nacional Autónoma de México)
    Abstract: During the last decade, developing (and some developed) economies have accumulated large amounts of international reserves, mainly for precautionary reasons. This phenomenon has been coupled with moderate economic growth. The resources being amassed largely overwhelm protective needs, there is an excess of resources that is being wasted, and which could be utilised for alternative productive projects, namely to promote growth. If insufficient aggregate demand can largely explain low growth, it is clear that this excess of international reserves can be used to stimulate aggregate demand. This paper argues that the excess of international reserves represents a potential source to boost growth.
    Keywords: international reserves; aggregate demand; economic growth
    JEL: F30 F40 O11 O19
    Date: 2008–10

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