Got a tricky question? Receive an answer from students like you! Try us!

Reassessing the impact of finance on growth, BIS Working Papers 381 - Assignment Example

Free
High school
Author : isom14
Assignment
Finance & Accounting
Pages 3 (753 words)
Download 0

Summary

Reassessing the impact of finance on growth, BIS working paper 381 Name: Institution: Course: Tutor name: Date: December 10, 2013. Reassessing the impact of finance on growth, BIS working paper 381 Summary of main results Cecchetti and Kharroubi, authors of the article, offer a traditional theoretical underpinning to the relationship financial sector and economic growth that led to the perception that growth in the financial sector is directly proportional to economic growth…

Extract of sample
Reassessing the impact of finance on growth, BIS Working Papers 381

Even though growth in the financial sector is good, too much of it reduces its value and the study further notes that excessive growth is detrimental to the economy. Many theoretical assumptions, such as effects of growth in the financial sector on reducing costs, improving investments, and managing resource distribution and risks, may however downplay these positions. The real consequences of booms in the financial sector, like in other sectors, however become evident after a burst that follows a boom to support detrimental effects of growth in the financial sector. The empirical study into the report investigated 50 countries from both developed and developing economies over the past 30 years. Factors such as the ratio of private credit to GDP and the proportion of total employment that financial sector accounts for, measure the sector’s size while volume of credit growth, relative to GDP, measured financial sector development (Cecchetti and Kharroubi 2012, p. 1, 2). The average GDP-per-worker growth that private credit contributes is one of the indicator results to the effects of growth in the financial sector on the economy. ...
Download paper
Not exactly what you need?

Related Essays

Finance and Growth Strategies
The paper tells that dividends are returns which are paid to the shareholders from the firm’s earnings for their investment in the company regardless of whether the earnings are generated in previous period or the current period. Dividends will influence the capital structure of the firm since retained earnings increase the value of the common stock than debt capital. A firm cannot assume the dividend policy to be irrelevant. In determining the amount to be paid as dividends, the firm should analyze the effect of the dividend policy on the operations of the. However, some financial analysts…
11 pages (2761 words)
Finance
Although, it is practically not possible to control some forces that operate outside a business, such as availability of the capital and the world economic conditions, management need to inspire and guide internal operations in helping ensure a secure competitive position within the marketplace. Moreover, both innovation and adaptability are essential in helping gain market share, and stay profitable in the event of fluctuating economic climates (Hill & Westbrook, 1997). Research show that for a business to remain being competitive in the market, it has to always impress innovative services…
5 pages (1255 words)
Have we learned any lessons from the financial crisis of 2007-8.
When the criticality of the matter dawned on the American society, it was difficult to accept the dire consequences of the downfall. Organizations deemed stable enough to survive any surging economic pressure proved to be at the verge of collapse in the 2008 scenario. President Obama had to help America resolve the issue, and settling it needed firm decisions taken in good time to save the average American from the consequences resulting from the crisis. This is how the Dodd-Frank law surfaced as a potential solution to the imminent financial collapsing of the great economy. It is of essence…
8 pages (2008 words)
Finance
The equity finance is an expensive and exclusive method for raising capital in the business and it comprises of ordinary and preference shareholdings, bonds and floating market shares. It also includes a listing cost and legal paper work, potential shareholders and raises wider opportunity for pool of finance (Slee, 2011). …
5 pages (1255 words)
Finance
There were already reports of rising default on subprime mortgages that further fuelled quickly thereafter. Such mortgages are usually given to borrowers with below average credit ratings which are mainly due to their higher average risk of evasion in loan repayment. The financial institutions often charge higher interest on subprime mortgages in order to compensate for the risk taken. Thus, as the banks began clear out more loans to home owners, the housing prices rose. The easy accessibility of credit in U.S. in addition to large foreign inflows led to the boom in construction and increased…
9 pages (2259 words)
finance
Sainsburys is second in terms of market share, ASDA is third and Morrisons is fourth (with 11.8), according to Reuters Finance. But when we look into market share increase over the past two years we find that Tesco’s profit margin in 2011 was 8.47% and decreased to 8.15% in 2012 perhaps reflecting the overall decline in retail profits due to the weakened economy. It is important to note though that Tesco was still operating with a profit margin of over 8%. When comparing this to Morrisons, who experienced an slightly decrease from 6.9% in 2011 to 6.89%, even though this was only a slight…
8 pages (2008 words)
finance
SOCAR also acts as the major rights holder in the oil and gas industry. It also acts as a government mean to control the oil and gas sector in the state of Azerbaijani. Oil exploration in the Caspian sea began in the year 1992 when the Kazakhstan government announced an oil exploration project in the Caspian sea. The Caspian Oilfields Development Project has an oil exploration scope of operation in the whole of the Azerbaijan state. The area under the project is broken down into oil fields all of which are controlled by the government through the SOCAR. The oil fields include Chirag Oil…
5 pages (1255 words)