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Discipline and Freedom in Financial Markets: How regulation and liberalisation influence the gains from finance

Adolfsson, Tobias LU (2018) NEKH04 20181
Department of Economics
Abstract (Swedish)
This paper investigates how the financial sector's institutional characteristics can allow an economy to benefit from financial deepening and limit the negative effects it can have. Specifically, it tests how macroprudential regulation and financial liberalisation affect the shape and behaviour of the finance–growth relationship. This is done by analysing a sample of 55 developing and developed economies from 1973-2008 with a non-linear fixed effects regression model. The results indicate that prudential regulation can have an initial negative effect on growth, which turns positive at high levels of financial development. It is shown that financial liberalisation can affect growth positively, but that it can also exacerbate the negative... (More)
This paper investigates how the financial sector's institutional characteristics can allow an economy to benefit from financial deepening and limit the negative effects it can have. Specifically, it tests how macroprudential regulation and financial liberalisation affect the shape and behaviour of the finance–growth relationship. This is done by analysing a sample of 55 developing and developed economies from 1973-2008 with a non-linear fixed effects regression model. The results indicate that prudential regulation can have an initial negative effect on growth, which turns positive at high levels of financial development. It is shown that financial liberalisation can affect growth positively, but that it can also exacerbate the negative effects of too much finance. (Less)
Please use this url to cite or link to this publication:
author
Adolfsson, Tobias LU
supervisor
organization
course
NEKH04 20181
year
type
M2 - Bachelor Degree
subject
keywords
financial development, regulation, liberalisation, institutions, economic growth
language
English
id
8947386
date added to LUP
2018-07-05 10:41:55
date last changed
2018-07-05 10:41:55
@misc{8947386,
  abstract     = {This paper investigates how the financial sector's institutional characteristics can allow an economy to benefit from financial deepening and limit the negative effects it can have. Specifically, it tests how macroprudential regulation and financial liberalisation affect the shape and behaviour of the finance–growth relationship. This is done by analysing a sample of 55 developing and developed economies from 1973-2008 with a non-linear fixed effects regression model. The results indicate that prudential regulation can have an initial negative effect on growth, which turns positive at high levels of financial development. It is shown that financial liberalisation can affect growth positively, but that it can also exacerbate the negative effects of too much finance.},
  author       = {Adolfsson, Tobias},
  keyword      = {financial development,regulation,liberalisation,institutions,economic growth},
  language     = {eng},
  note         = {Student Paper},
  title        = {Discipline and Freedom in Financial Markets: How regulation and liberalisation influence the gains from finance},
  year         = {2018},
}