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on Financial Development and Growth |
| By: | Timothy Cheston (Center for International Development at Harvard University); Brad Cunningham (Center for International Development at Harvard University); Ricardo Hausmann (Harvard's Growth Lab); Jorge Tapia (Center for International Development at Harvard University) |
| Abstract: | Finance forms a necessary input for production, one so central that it was placed atop the decision tree in the original Growth Diagnostics framework. As we argue, one of the thorniest findings from more than a decade of practice in conducting Growth Diagnostics has been that it is often more difficult to disprove a finance constraint than it is to prove one. Finance has often earned more attention than deserved when considering the many complementary inputs that must be present for production to take place and investments to be profitable. The challenge is in getting the diagnostic right, starting with the use of sound evidence to test for signals. This paper revisits the starting question of the Growth Diagnostic framework: what does it mean for finance to be a constraint to economic growth? We provide an updated, detailed decision tree for finance, including a rethink of other sources of finance constraints, such as insufficient equity, that were not fully considered in the original decision tree. Our starting point to test for the presence of a finance constraint is to recognize that every financial system suffers from asymmetric information. While information is important for almost all assets in economic transactions, in financial markets, information is the asset. The inherent nature of information asymmetries to financial markets is, in part, what makes finance a focal point for constraint analysis, as greater size and sophistication of financial systems do not make a country immune to finance constraints. We present three reasons that finance may be constrained: a) insufficient aggregate savings, due to a both inadequate domestic savings and restricted access to foreign borrowing, resulting in not enough loanable funds to finance good projects; b) inadequate institutions and tools for assessing and mitigating risk, that are unable to resolve information asymmetries, preventing markets’ access to savings; and c) problems in financial intermediation, where intermediation itself may be high-risk, monopolistic, or otherwise inefficient to result in insufficient bank lending, or may face borrowers who lack sufficient equity. The paper aims to share lessons learned in testing whether finance is constrained – or not, as well as the policy space to address a finance constraint. The policy discussion emphasizes the risk of misclassifying finance as a constraint when it is not binding on production, as the alternate response of overregulating financial markets can create new intermediation failures to the trust between savers and borrowers. Ultimately, we conclude that policy responses to a finance constraint must be as context-specific as the syndrome presented by the diagnosis, where creating functional financial markets lies in preserving the delicate balance of trust between savers and borrowers. |
| Keywords: | Growth Diagnostics |
| URL: | https://d.repec.org/n?u=RePEc:glh:wpfacu:249 |
| By: | Philippe Aghion; Antonin Bergeaud; Mathias Dewatripont; Johannes Matt |
| Abstract: | We develop a model of endogenous growth and firm dynamics with soft budget constraints, where firms differ in their innovation speed and slower firms need additional financing in order to eventually innovate. As creditors cannot anticipate refinancing needs in advance nor credibly commit to withholding future refinancing, a Soft Budget Constraint Syndrome emerges, causing excessive entry by slow firms and crowding out potentially more efficient innovators. The resulting trade-off between the positive effects of budget constraint softening on innovation by incumbents and slow-type entrants and its negative effects on entry by fast innovators, generates a hump-shaped relationship between refinancing costs and aggregate growth. Calibrating the model to French firm-level data, we show that the budget constraint softening associated with the decline in interest rates in the aftermath of the Global Financial Crisis accounts for 54% of the observed drop in the aggregate growth rates post-crisis. Although the softening in budget constraints has had a positive effect on incumbent innovation, this was more than offset by the resulting decrease in the entry rates of good firms (by 61% relative to the pre-crisis steady state). |
| Keywords: | firm dynamics, credit growth, soft budget constraint |
| Date: | 2025–04–10 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2091 |
| By: | Miguel Faria-e-Castro; Julian Kozlowski; Jeremy Majerovitz |
| Abstract: | We develop a methodology to estimate the cost of capital using credit registry microdata, and apply it to study capital allocation efficiency in the United States. Our measure incorporates the contractual interest rate, expected default probability, recovery rate, and expectations of future rates. We estimate three distinct rates: (i) the lender's discount rate, (ii) the firm's cost of capital, and (iii) the social cost of capital. We derive a sufficient statistic for misallocation based on the first and second moments of the social cost of capital. Dispersion in this rate captures both heterogeneity in lender discounting and the presence of financial frictions. Normal times feature modest amounts of misallocation, corresponding to an output loss of 0.5%. However, during the 2020-2021 period, misallocation increased to 1.1%, primarily due to the underpricing of riskier loans. |
| Keywords: | cost of capital; misallocation; macrofinance |
| JEL: | D24 E22 E44 O47 O51 |
| Date: | 2025–06–10 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedlwp:100099 |
| By: | Francesco Ferrante; Andrea Prestipino; Immo Schott |
| Abstract: | Long-term debt is the main source of firm-financing in the U.S. We show that accounting for debt maturity is crucial for understanding business cycle dynamics. We develop a macroeconomic model with defaultable long-term debt and equity adjustment costs. With long-term debt, firms have an incentive to increase leverage in order to dilute the value of outstanding debt. When equity issuance is costly, this incentive helps firms raise more debt through a debt dilution channel and mitigates the decline in net worth through a balance sheet channel, dampening the decline in investment in response to a negative financial shock. Using firm-level data, we estimate equity issuance costs and incorporate our findings into an estimated medium-scale DSGE model. Accounting for debt maturity and the cost of equity financing implies that credit supply shocks are the primary drivers of business cycle fluctuations. |
| Keywords: | Long-term debt; Financial frictions; Debt overhang; Macroeconomic activity |
| JEL: | E32 E44 E51 |
| Date: | 2025–05–27 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgif:1409 |
| By: | M. Delis (Audencia Business School); M. Iosifidi (Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School) |
| Abstract: | Using global data on syndicated loans, we show that any negative effect of stronger creditor rights on loan spreads, as identified in the prior literature (Qian and Strahan, 2007; Bae and Goyal, 2009), disappears once we include a single country characteristic: country size. This finding is robust to several identification methods, both global samples and within-country changes in creditor rights, different panel spans, and hundreds of control variables. We identify that key origins of the effect of country size on loan pricing are ethnic fractionalization and within-country heterogeneity in economic preferences, which create country risk. |
| Keywords: | Creditor rights, Bank credit, Loan spreads, Country size, Ethnic fractionalization |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04982820 |
| By: | Galo Nuño (BANCO DE ESPAÑA, CEMFI AND CEPR) |
| Abstract: | The natural interest rate is the real rate that would prevail in the long run. The standard view in macroeconomics is that the natural rate depends exclusively on structural factors, such as productivity growth and demographics. This paper challenges this view by discussing three alternative, and complementary, views: i) that the natural rate depends on fiscal policy via the stock of risk-free assets; ii) that it depends on monetary policy via the central bank inflation target; and iii) that it depends on persistent supply shocks, such as tariffs or wars. These three theories share the relevance of precautionary saving motives. The paper concludes by drawing some lessons for monetary policy design. |
| Keywords: | financial HANK model, monetary-fiscal interactions, deep learning, cost-push shocks |
| JEL: | E32 E58 E63 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2528 |
| By: | Matthias Burgert; Michael Chui; Denis Gorea; Fabrizio Zampolli |
| Abstract: | Private business fixed investment has fallen or remained flat in advanced economies for decades, with a recent levelling-off also observed in several emerging market economies. The recent increase in uncertainty due to trade tensions will dampen investment while also reducing the effectiveness of monetary policy. In the long run, the outlook for private business investment depends on the potential need to reconfigure supply chains disrupted by higher trade tariffs as well as governments' efforts to boost public investment and implement structural reforms. |
| Date: | 2025–06–11 |
| URL: | https://d.repec.org/n?u=RePEc:bis:bisblt:103 |
| By: | Compano Ramon (European Commission - JRC) |
| Abstract: | This report provides an analysis of the current financial and techno-economic landscape in Europe, with a specific focus on the role of public organizations investing in innovative companies. While theprimary focus is on equity-based instruments, the report addresses the interplay between equityfinancing and complementary financial instruments, as well as factual challenges to put them intopractice. It contributes to the understanding of Europeâs complex funding landscape, particularlyfrom the angle of public funding bodies. It examines the mandate and activities of governmentalventure capital organizations within the broader venture capital ecosystem. Drawing on empiricalevidence, the report highlights key challenges faced by Governmental Venture Capital (GovVC)initiatives and explores potential avenues for improvement. The report is sustained by the outcomesof a workshop held in Seville that brought together experts and practitioners who share experiencesand best practices on government-backed initiatives. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc140763 |
| By: | Lee, Eunsuk (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Oh, Gee Young (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | This brief examines how evaluations are perceived and used in Korea’s international development cooperation, based on a stakeholder survey and comparative review of international practices. While ODA evaluations have become increasingly institutionalized, their actual use remains limited—often serving symbolic or compliance-related purposes rather than informing decisions or fostering learning. The survey reveals key barriers, including a lack of actionable recommendations, limited accessibility, and a mismatch between evaluation outputs and user needs. (the rest omitted) |
| Keywords: | Evaluation; stakeholder; Korea; international development cooperation |
| Date: | 2025–04–28 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kiepwe:2025_012 |
| By: | Guglielmo Maria Caporale; Matteo Alessi |
| Abstract: | The aim of this paper is to investigate the relationship between local banking and prosperity at the municipal level in Italy from 2011 to 2021. The latter variable is measured using an index proposed by Sen (1976). The analysis is based on panel regressions including a measure of local banking and other control variables at the municipality level. The static results indicate a positive and significant association between the presence of local banking and prosperity. They are confirmed by the dynamic panel estimates, and are robust to using different proxies for local bank presence. Their implication is that cooperative banking plays a crucial role in promoting prosperity at the local level. |
| Keywords: | well-neing, cooperative banking, static and dynamic panels, GMM |
| JEL: | I31 G21 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11926 |
| By: | Roman Goncharenko (KU Leuven - Department of Accountancy, Finance and Insurance (AFI); Central Bank of Ireland); Mikhail Mamonov (TBS Business School); Steven Ongena (University of Zurich - Department Finance; Swiss Finance Institute; KU Leuven; NTNU Business School; Centre for Economic Policy Research (CEPR)); Svetlana Popova (The Central Bank of Russian Federation); Natalia Turdyeva (Bank of Russia) |
| Abstract: | How do firms respond to sudden and forcible closures of their lenders? Using unique credit register data from a setting where two-thirds of banks were closed within a decade, we find that neither bad nor good firms delay repayments or switch lenders before closures. Afterward, bad firms lose subsidized credit and experience sharp declines in employment, borrowing, and sales, while good firms improve performance. This divergence stems from banks’ prior underpricing of bad firms’ credit risk. Ultimately, good firms match with new solid banks, while bad firms gravitate toward not-yet-detected weak banks---especially where boards overlap or markets are unconcentrated. |
| Keywords: | Firms, Bank clean-up policies, Regulatory forbearance, Credit risk underpricing, Common board membership, Real effects |
| JEL: | G21 G28 G32 L25 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:chf:rpseri:rp2552 |
| By: | Rajesh P. Narayanan; Dimuthu Ratnadiwakara; Philip Strahan |
| Abstract: | We study U.S. bank branch openings and closings from 2001 to 2023. Both are more common in areas with low deposit franchise value, a consequence of greater interest-rate sensitivity among financially sophisticated households with higher digital banking adoption. The effects are strongest for large banks. Lending plays a minimal role. Incumbents retain branches where depositors are less sensitive to rates because they can extract deposit spreads; entrants avoid such markets because sticky customers are difficult to attract. The pandemic accelerated closures by increasing digital reliance. Our findings highlight deposit franchise value as the primary driver of modern branch restructuring. |
| JEL: | G20 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33773 |
| By: | Pietro Calice |
| Abstract: | This paper extends the classic Tinbergen rule within the context of financial regulation, explicitly accounting for the inverted U-shaped relationship between market competition and financial stability. Conventional policy frameworks, premised on independent relationships between policy targets and instruments, inadequately address the complex interactions inherent in the competition-stability nexus. The proposed framework addresses this gap by incorporating four critical dimensions overlooked in traditional applications of the Tinbergen rule: (i) nonlinear interactions among policy objectives, (ii) conflicts arising at extremes of competition, (iii) a hierarchical prioritization of financial stability objectives, and (iv) inherent structural constraints of prudential instruments. The paper introduces a dynamic optimization approach that calibrates policy instruments according to the financial system’s position along the competition-stability curve. Additionally, it provides a comprehensive taxonomy of regulatory instruments, categorizing them based on their primary targets and secondary (cross-) effects, thereby facilitating state-dependent policy formulation. The paper also outlines practical institutional arrangements and coordination mechanisms that are crucial for effective implementation. Overall, the approach may help to equip regulators with strategies for dynamically managing competition and stability, ultimately enhancing the efficiency and robustness of financial systems. |
| Date: | 2025–05–19 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11124 |
| By: | Tarishi Matsuoka; Makoto Watanabe |
| Abstract: | This paper examines the role of Central Bank Digital Currency (CBDC) in a monetary model in which fundamental-based bank runs arise endogenously. We demonstrate that introducing a CBDC designed to replicate the properties of cash displaces physical cash and, when offered at a sufficiently attractive rate, can increase the likelihood of a bank run. In contrast, when the CBDC is designed to resemble bank deposits, cash, CBDC, and deposits can coexist as media of exchange, and a high CBDC rate can eliminate the risk of runs. We further characterize the optimal CBDC policy within this framework. |
| Keywords: | monetary equilibrium, bank run, CBDC |
| JEL: | E42 E58 G21 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11922 |
| By: | Zakaria Savon (Faculty of Legal, Economic and Social Sciences- Souissi Mohamed V University of Rabat, Morocco) |
| Abstract: | In recent years, Morocco has witnessed a notable and troubling increase in non-performing loans (NPLs). Data from Bank Al-Maghrib, the central bank of Morocco, reveals that nonperforming loans accounted for over 8% of the total credit volume in 2022.These loans present significant challenges, not only for the resilience of the banking sector but also because they can result in tighter credit conditions, making it increasingly difficult for businesses and consumers to obtain financing. This study conducts a comprehensive analysis of the impact of non-performing loans on credit supply within the Moroccan banking system, covering the period from the first quarter of 2009 to the fourth quarter of 2022. Findings from the ARDL model indicate that the rate of non-performing loans substantially impedes credit availability, both in the short term and the long term. This underscores the critical relationship between financial stability and economic stability. |
| Keywords: | Non-performing loans, Credit supply, Moroccan banking system, ARDL |
| Date: | 2025–05–08 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05060821 |
| By: | Fatih Kansoy |
| Abstract: | This research presented an empirical investigation of the determinants of the net interest margin in Turkish Banking sector with a particular emphasis on the bank ownership structure. This study employed a unique bank-level dataset covering Turkey`s commercial banking sector for the 2001-2012. Our main results are as follows. Operation diversity, credit risk and operating costs are important determinants of margin in Turkey. More efficient banks exhibit lower margin and also price stability contributes to lower margin. The effect of principal determinants such as credit risk, bank size, market concentration and inflation vary across foreign-owned, state-controlled and private banks. At the same time, the impacts of implicit interest payment, operation diversity and operating cost are homogeneous across all banks |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2506.04384 |
| By: | International Monetary Fund |
| Abstract: | 2025 Selected Issues |
| Date: | 2025–06–17 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfscr:2025/133 |
| By: | Yu-Ting Chiang; Piotr Żoch |
| Abstract: | We characterize governments' optimal responses to asset market disturbances across a broad class of models with financial frictions. We show that the Ramsey plan can be achieved by a policy rule targeting a specific relationship between asset returns, regardless of the underlying disturbances. This relationship is determined by asset supply and demand elasticities that can be estimated empirically with standard identification strategies. Absent financial frictions, the optimal policy stabilizes spreads across all assets. However, in the presence of financial frictions, the optimal rule prescribes time-varying spreads to facilitate financial intermediation. We apply our framework to study the optimal design of asset purchase and lending programs, as implied by key empirical estimates of asset supply and demand elasticities. |
| Keywords: | monetary policy; financial frictions; asset demand estimation; sufficient statistics |
| JEL: | E2 E6 H3 H6 |
| Date: | 2025–06–16 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedlwp:101128 |
| By: | Imad Talhartit (Université Hassan 1er [Settat], Ecole Nationale de Commerce et Gestion - Settat, Laboratory of Finance, Audit and Organizational Governance Research); Sanae Ait Jillali (Université Hassan 1er [Settat], Ecole Nationale de Commerce et Gestion - Settat, Laboratory of Finance, Audit and Organizational Governance Research); Mounime El Kabbouri (Université Hassan 1er [Settat], Ecole Nationale de Commerce et Gestion - Settat, Laboratory of Finance, Audit and Organizational Governance Research) |
| Abstract: | In today's data-driven economy, predicting stock market behavior has become a key focus for both finance professionals and academics. Traditionally reliant on historical and economic data, stock price forecasting is now being enhanced by AI technologies, especially Deep Learning and Natural Language Processing (NLP), which allow the integration of qualitative data like news sentiment and investor opinions. Deep Learning uses multi-layered neural networks to analyze complex patterns, while NLP enables machines to interpret human language, making it useful for extracting sentiment from media sources. Though most research has focused on developed markets, emerging economies like Morocco offer a unique context due to their evolving financial systems and data limitations. This study takes a theoretical and exploratory approach, aiming to conceptually examine how macroeconomic indicators and sentiment analysis can be integrated using deep learning models to enhance stock price prediction in Morocco. Rather than building a model, the paper reviews literature, evaluates data sources, and identifies key challenges and opportunities. Ultimately, the study aims to bridge AI techniques with financial theory in an emerging market setting, providing a foundation for future empirical research and interdisciplinary collaboration. |
| Keywords: | Stock Price Prediction, Deep Learning, Natural Language Processing (NLP), Sentiment Analysis, Macroeconomic Indicators, Emerging Markets, Moroccan Financial Market |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05094029 |
| By: | Rui Fan (Xian Jiaotong University); Alex Nikolsko-Rzhevskyy (Lehigh University); Oleksandr Talavera (University of Birmingham) |
| Abstract: | We examine the link between the U.S. stock market and foreign investor attention using SEC EDGAR log files and the MaxMind database to connect non-U.S. IP addresses with characteristics of S&P 500 stocks. A 10% increase in foreign EDGAR searches is associated with a 0.6% rise in abnormal daily returns. The effect is stronger for firms with lower sales, limited analyst coverage, lower institutional ownership, or high exposure to China. Our findings suggest that foreign attention, as reflected in EDGAR activity, shapes stock outcomes and that non-U.S. government policies may also influence U.S. market performance. |
| Keywords: | EDGAR system; MaxMind; stock market; investor attention; information acquisition |
| JEL: | G12 G14 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:bir:birmec:25-02 |
| By: | Gendron, Yves (Université Laval); Madelaine, Alexandre; Paugam, Luc (HEC Paris); Stolowy, Hervé (HEC Paris) |
| Abstract: | In 2021, a social movement rallying retail investors unexpectedly shocked Wall Street, forcing a prominent multi-billion-dollar hedge fund to shut down one year later, after incurring massive financial losses. Social movements in financial markets have significantly developed in the wake of the 2007–09 financial crisis, resulting in the emergence of various collective actions. We analyze one recent example of such action undertaken by the r/WallStreetBets (WSB) community on Reddit, which disrupted the stock prices of several “meme stocks” (e.g., GameStop) by disseminating influential investment narratives. We analyze the 150 most upvoted Due Diligence posts on WSB and interview eight members of its community. We find that a popular expertise in investment narratives emerged, developed, and was propagated on this digital platform. WSB authors’ claim to popular expertise is made in a hybrid language combining traditional financial expertise with an accessible and entertaining writing style, complemented by references to pop culture. Our analysis brings out a growing resentment among retail investors about the unfairness of financial markets, and its role in mobilizing them for collective action that challenged the existing order of things. Yet this widespread resentment did not spontaneously translate into a meaningful, sustainable collective action initiative. Our thesis is that the development of popular expertise played an instrumental role in the formation of WSB’s collective action initiative targeting several perceived investment opportunities. |
| Keywords: | Collective action; Digital platforms; Fairness in financial markets; Popular expertise; Social movement; WallStreetBets |
| JEL: | G10 G41 M40 |
| Date: | 2025–03–03 |
| URL: | https://d.repec.org/n?u=RePEc:ebg:heccah:1552 |
| By: | Jutta G. Kurth; Adam A. Majewski; Jean-Philippe Bouchaud |
| Abstract: | We amend and extend the Chiarella model of financial markets to deal with arbitrary long-term value drifts in a consistent way. This allows us to improve upon existing calibration schemes, opening the possibility of calibrating individual monthly time series instead of classes of time series. The technique is employed on spot prices of four asset classes from ca. 1800 onward (stock indices, bonds, commodities, currencies). The so-called fundamental value is a direct output of the calibration, which allows us to (a) quantify the amount of excess volatility in these markets, which we find to be large (e.g. a factor $\approx$ 4 for stock indices) and consistent with previous estimates; and (b) determine the distribution of mispricings (i.e. the difference between market price and value), which we find in many cases to be bimodal. Both findings are strongly at odds with the Efficient Market Hypothesis. We also study in detail the 'sloppiness' of the calibration, that is, the directions in parameter space that are weakly constrained by data. The main conclusions of our study are remarkably consistent across different asset classes, and reinforce the hypothesis that the medium-term fate of financial markets is determined by a tug-of-war between trend followers and fundamentalists. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2505.07820 |
| By: | YANG, ZHANG (Department of Finance and Business Economics, Faculty of Business Administration / Asia-Pacific Academy of Economics and Management, University of Macau); JIANXIONG LIN (QIFU Technology, China); YIHE QIAN (Department of Finance and Business Economics, Faculty of Business Administration, University of Macau); LIANJIE SHU (Faculty of Business Administration , University of Macau) |
| Abstract: | MachiAs a key enabler of poverty alleviation and equitable growth, financial inclusion aims to expand access to credit and financial services for underserved individuals and small businesses. However, the elevated default risk and data scarcity in inclusive lending present major challenges to traditional credit assessment tools. This study evaluates whether machine learning (ML) techniques can improve default prediction for small-business loans, thereby enhancing the effectiveness and fairness of credit allocation. Using proprietary loan-level data from a city commercial bank in China, we compare eight classification models—Logistic Regression, Linear Discriminant Analysis (LDA), K-Nearest Neighbors (KNN), Support Vector Machine (SVM), Decision Tree, Random Forest, XGBoost, and LightGBM—under three sampling strategies to address class imbalance. Our findings reveal that undersampling significantly enhances model performance, and tree-based ML models, particularly XGBoost and Decision Tree, outperform traditional classifiers. Feature importance and misclassification analyses suggest that documentation completeness, demographic traits, and credit utilization are critical predictors of default. By combining robust empirical validation with model interpretability, this study contributes to the growing literature at the intersection of machine learning, credit risk, and financial development. Our findings offer actionable insights for policymakers, financial institutions, and data scientists working to build fairer and more effective credit systems in emerging markets. |
| Keywords: | machine learning, financial inclusion, small business, China, credit risk assessment |
| JEL: | G21 G32 C53 O16 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:boa:wpaper:202532 |
| By: | Thomas Delcey (LEDi - Laboratoire d'Economie de Dijon [Dijon] - UBE - Université Bourgogne Europe) |
| Abstract: | Where does financial economics come from? This article studies the origins of foundational ideas of financial economics such as price spreads, arbitrage, and the interpretation of price as a reflection of information. Based on his publications and archival and interview materials, this article traces Holbrook Working's intellectual journey between the 1920s and 1960s. Working was a leading North American agricultural economist who conducted pioneering analyses of futures markets and speculation and strongly influenced early financial economists like Paul Samuelson, Paul Cootner, Hendrick Houthakker, and Lester G. Telser. Working sheds light on a North American view of speculation that contrasted with the prevailing British view. |
| Date: | 2025–04–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05056404 |