Finance, Growth, and Poverty

I started my career researching the real sector impact of financial deepening.  While 20 years of empirical finance and growth literature has seemingly been thrown into doubt by the Global Financial Crisis, the non-linear nature of the finance and growth relation has been present in our studies from the very beginning.  More recently, I have been trying to gauge the reasons for why financial deepening has little if any positive impact on growth in high-income countries. A lot of this more recent research and some forward looking thoughts are summarized in my Maxwell Fry Lecture.  With different co-authors, I have also explored the relationship between financial development, inequality and poverty reduction, showing that finance is not only pro-growth but also pro-poor.

Liquidity Creation, Investment, and Growth (joint with Robin Doettling, Thomas Lambert and Mathijs Van Dijk), Journal of Economic Growth 28, 297-336, 2023

Follow the Money: Does the financial sector intermediate natural resource windfalls?Journal of International Money and Finance 130, Article 102679, 2023

Finance and Poverty: Evidence from India, with Meghana Ayyagari and Mohamad Hoseini, Journal of Corporate Finance 60, Article 101515, 2020

Too Hot, Too Cold, Or Just Right? Assessing Financial Sector Development Across the Globe, with Adolfo Barajas, Era Dabla-Norris and Seyed Reza Yousef, IMF Working Paper 13/81. 

Finance, Fragility and Growth: The Role of Government, Maxwell Fry Lecture of Global Finance 2012, published in: International Journal of Accounting, Banking and Finance 5, 49-77, 2013.

Finance and Growth: Lessons from the literature and the recent crisis, July 2012. Prepared for the LSE Growth Commission

Is More Finance Better? Disentangling Intermediation and Size Effects of Financial Systems, with Hans Degryse and Christiane Kneer, Journal of Financial Stability 10, 50-64, 2014. 

The Role of Finance in Economic Development – Benefits, Risks, and Politics, in: Dennis Müller (Ed.): Oxford Handbook of Capitalism, 2012.

Who Gets the Credit? And Does it Matter? Household vs Firm Lending accross Countries, with Berrak Buyukkarabacak, Felix Rioja andNeven Valev, B.E. Journal of Macroeconomics: Contributions 12, May 2012.


Finance and Oil - Is there a Resource Curse in Financial Development? In: Rabah Arezki, Thorvaldur Gylfason and Amadou Sy (Eds.): Beyond the Curse: Policies to Harness the Power of Natural Resources, Washington DC: IMF, 2011.

Big Bad Banks? The Impact of U.S. Branch Deregulation on Income Distribution*, with R. Levine and A. Levkov, Journal of Finance 65, 1637-67, 2010. *Brattle Group Prize for Distinguished Paper 2010.

Financial institutions and markets across countries and over time with Asli Demirgüç-Kunt and Ross Levine, World Bank Economic Review 24, 77-92, 2010.

The Econometrics of Finance and Growth, Palgrave Handbook of Econometrics, Vol. 2, April 2008.

Finance, Inequality and the Poor, with A. Demirgüç-Kunt and R. Levine, Journal of Economic Growth 12, March 2007, pp. 27-49.

Financial Intermediary Development and Growth Volatility: Do Intermediairies Dampen or Magnify Shocks?, with Mathias Lundberg and Giovanni Majnoni, Journal of International Money and Finance 25, 2006.

Stock Markets, Banks and Growth: Panel Evidence, with Ross Levine, Journal of Banking and Finance 28, March 2004, pp. 423-442, 2004.

Industry Growth and Capital Allocation: Does Having a Market- or Bank Based System Matter?, with Ross Levine, Journal of Financial Economics 64, 147-180, 2002.

Finance and the Sources of Growth, with Ross Levine and Norman Loayza, Journal of Financial Economics 58, 261-300, 2000. 

A New Database on Financial Development and Structure, with Asli Demirgüç-Kunt and Ross Levine, World Bank Economic Review,  597-605, 2000.

Financial Intermediation and Growth: Causality and Causes, with Ross Levine and Norman Loayza, Journal of Monetary Economics 46, 31-77, 2000.