Finance and Growth: A Critical Survey*


  • *

     I received generous funding from the Centre for Dynamic Macroeconomic Analysis at St Andrews. Helpful comments were received from anonymous referees. Many thanks are also due to Charles Nolan and Gary Shea for discussions and advice. All remaining errors are my own.

: Alex Trew, School of Economics and Finance, University of St Andrews, St Andrews, Fife KY16 9AL, UK. Email:


We present a survey of the finance-growth nexus that raises a number of qualifications to the standard interpretation. We investigate doubts regarding empirical consensus and we consider the prevalence of cross-section econometrics as dominant in shaping the present theoretical consensus. The core implications of many finance and growth theories are shown to be disconnected not only from their modern empirical counterparts, but also from the historical literature.