What are the long-term effects of financial development on economic growth?

Financial development, characterized by improvements in the availability and efficiency of financial systems, has been shown to have positive long-term effects on economic growth. It can stimulate investment, promote innovation, and facilitate the efficient allocation of resources, resulting in higher levels of productivity and overall economic performance. Additionally, a developed financial sector can enhance access to credit and reduce transaction costs, which can further boost economic growth over time. Overall, sustained financial development can contribute to sustained, stable, and inclusive economic growth in the long run.

This mind map was published on 21 February 2024 and has been viewed 67 times.