from this analysis and feed this directly into our theoretical research. A unique dataset encompassing the industrial revolution and built by a faculty member at St Andrews (Shea, forthcoming) will aid us in this respect, and the growing interest in the econometric analysis of historical financial data (e.g. Rousseau and Sylla, 2004 and Wright, 2004) is also likely to yield important insights; and
2) Following a survey of the theoretical literature, it is clear that the development of a growth theory which incorporates the role of financial intermediation in a realistically dynamic and endogenous way is necessary to clarify its significance (or otherwise) as a growth-determining factor. The importance of information asymmetry, of disaggregation, of endogenous financial structures and of optimal institutions are all key in this context. Each of these questions might enter into an explanation of heterogeneous international growth paths and so may have policy implications.
It is intended that these two themes will converge into a realistic dynamic general equilibrium model of growth that can be calibrated to the data. |
