publication
Picto Article

Nonlinearities in the relationship between finance and growth

Ugo PANIZZA
2018

This paper reviews the empirical literature on the links between finance and growth with a special focus on the literature that has shown that the marginal contribution of financial depth to economic growth becomes negative in countries with large financial sectors (the "too much finance" result). It then assesses the empirical and theoretical validity of recent criticisms to this literature and concludes by discussing avenues for future research aimed at identifying the channels through which a very large financial sector can slow down economic growth.