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Trust, Financial Regulation, and Growth
Author(s) -
Capie Forrest
Publication year - 2016
Publication title -
australian economic history review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.493
H-Index - 16
eISSN - 1467-8446
pISSN - 0004-8992
DOI - 10.1111/aehr.12082
Subject(s) - mercantilism , government (linguistics) , economics , financial intermediary , finance , financial system , economic policy , market economy , linguistics , philosophy
Money and financial intermediation are important elements in economic growth. Both depend heavily on trust for their efficient working. In the second half of the twentieth century, trust was eroded and even broke down. Regulation replaced it. The welfare costs grew, and economic growth was damaged. The opposite happened in the move from mercantilism in the eighteenth century to small government and sound money in the nineteenth century. Growth was improved. Perhaps trust can be restored again.