Philippe Aghion|Peter Howitt|David Mayer?Foulkes
The Effect of Financial Development on Convergence: Theory and Evidence*
Federal Reserve|Federal Reserve Board of Governors|Brigham Young University|Federal Reserve|Federal Reserve Board of Governors|Brigham Young University|Federal Reserve|Federal Reserve Board of Governors|Brigham Young University
introduce imperfect creditor protection multicountry schumpeterian growth modelthe theory predicts country critical level financial development converge growth rate world technology frontier countries strictly lower longrun growth ratewe present evidence supporting implications form crosscountry growth regression significant sizable negative coefficient initial percapita gdp relative united states interacted financial intermediationin addition find variables representing schooling geography health policy politics institutions affect significance interaction financial intermediation initial per capita gdp show independent effect convergence regressionsour findings robust removal outliers alternative conditioning sets estimation procedures measures financial development