FINANZA E CRESCITA

This Finance and Growth course is empirical in nature. At least 50% of the available time will be used for in-class exercises. Therefore, together with the theoretical discussion of the topics, the analysis of real-world data using statistical and econometric tools (however explained and/or recalled during the lectures) is the distinguishing element.

The explicit aim is to teach how to use and analyse (by means of software) data in order to draw conclusions on the topics being taught.  For this reason, attendance is indeed necessary, also to support the exercises that will contribute to the final assessment.

Economic growth theory is no longer the subject of this teaching.

__________________________________________A (20 %)

A. THE FINANCIAL SYSTEM

A.1. What is meant by the financial system, the institutions of the FS. The functions of the financial system.

A.2. Financial innovation and the growth of the shadow banking system. 

__________________________________________ B (5 %)

B. INTRODUCTION TO THE CONCEPT OF ECONOMIC GROWTH

B.1 Economic growth in the short run. Defining economic growth (real GDP). A look at the components of the national accounts identity.

B.2. Economic growth in the long run. Living standards. Economic growth in the long run: productivity, technological progress, innovation, etc.

__________________________________________ C (15 %)

C. NOTIONS OF ECONOMETRICS TO UNDERSTAND THE EMPIRICAL STUDIES INCLUDED IN THE PROGRAM

C.1. Longitudinal data, time series, panel data. Multivariate regression analysis.

__________________________________________ D (60 %)

D. FINANCE-GROWTH NEXUS

D.1. Financial development and economic growth: theory

D.2. Financial development and economic growth: evidence 

D.3. A critical view of the FGN

The multi-thematic and innovative nature of this course implies the absence of a main reference text. Instead, the scholarly article on which the course is built is "Levine, R. (2005), "Finance and growth: theory and evidence," Handbook of economic growth, Elsevier, 2005(1): 865-934."

All issues presented and discussed will still have a clear reference for study. Among the main ones:

- Mishkin+Eakins-2018, Financial Markets and Institutions, 9th edition: chapter 2.

- Levine, R. (2005), "Finance and growth: theory and evidence," Handbook of economic growth, Elsevier, 2005(1): 865-934.

- Levine R. (2021), "Finance, growth and inequality," IMF WP 21/164.

- Pindyck, Rubinfield (2018), Microeconomics, appendix: the basics of Regression

- EconCore project, The Economy, Chapter 1.

For the exact detail of the reference for each individual topic covered, please refer to the document "F&C2526 - Study References" which will be available on Studium.

For the theory part:

"Explain how the financial system is functional for economic growth with reference to the screening that banks exert on the demand for loans received."

"List the main reasons why some recent developments in the financial system may undermine its stability and growth, for example, with reference to the 2008/9 financial crisis."

For the analysis part:

"Using the available data, state the coefficient for the effect of increased public governance of banks on real GDP growth in the sampled countries (multivariate regression analysis)."

"After transforming nominal GDP to real, calculate its correlation with the amount of debt issuance and plot the series in a graph."