Abstract
Far from being a factor contributing to the economic stagnation of the 1990s, the Italian banking and financial system with its structural transformation and improved performance worked and is working in the opposite direction, fostering growth. Further gains in the efficiency of the financial industry can make a significant additional contribution to raising the Italian economy’s growth potential.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Notes
R.C. Merton and Z. Bodie, ‘A Conceptual Framework for Analyzing the Financial Environment’, in D.B. Crane et al. (eds), The Global Financial System: A Functional Perspective, Harvard Business School Press, Cambridge, MA, 1995.
S. Kuznets, Modem Economic Growth: Rate, Structure, and Spread, Yale University Press, New Haven, CT, 1966, p. 81. In economies in which the service sector is increasingly preponderant, these factors tend to become even more important. An advanced service economy is inconceivable, has no chance of developing, in a society lacking in education.
Educational shortcomings block growth both on the supply side and in the demand for services and human capital. For a long-term quantitative treatment, see A. Maddison, Monitoring the World Economy 1820–1992, OECD, Paris, 1995, tables 2–6 (Successive Steps in Growth Accounting, 1820–1992’), pp. 41–2.
W.J. Baumol, Entrepreneurship, Management, and the Structure of Payoffs, MIT Press, Cambridge, MA, 1993
and above all H. Lydall, A Critique of Orthodox Economics. An Alternative Model, Macmillan, London, 1998.
On the various theories of the entrepreneur, see also M. Casson, The Entrepreneur: An Economic Theory, Martin Robertson, Oxford, 1982.
Another illustrious victim of this philological superficiality is Joan Robinson. She has been singled out as the extreme case of a theoretical economist who supposedly considered the financial structure to be entirely endogenous, hence practically irrelevant, to the process of growth. Where enterprise leads finance follows’ is the phrase of hers most frequently cited, and most tautologically when taken out of context, by this literature. It is remarkable that a student of Keynes’s should be accused of underestimating the importance of money and finance. What is most surprising is that in that same book, in those same pages, practically in the same passage, the significance of finance is recognized, and Robinson even refers explicitly to the ‘legal and institutional arrangements and the habits of lenders’ (J. Robinson, The Rate o Interest and Other Essays, Macmillan, London, 1952, p. 86).
J.A. Schumpeter, Business Cycles:A Theoretical, Historical, and Statistical Analysis of the Capitalist Process, McGraw—Hill, New York, 1939, vol. 1, p. 116 (italics added).
Copyright information
© 2005 Pierluigi Ciocca
About this chapter
Cite this chapter
Ciocca, P. (2005). Finance and Growth. In: The Italian Financial System Remodelled. Palgrave Macmillan, London. https://doi.org/10.1057/9780230005921_9
Download citation
DOI: https://doi.org/10.1057/9780230005921_9
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-51736-7
Online ISBN: 978-0-230-00592-1
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)