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Money and economic development: A long‐run perspective
Author(s) -
SchaiffelNielsen Morten Sølvsten
Publication year - 2020
Publication title -
economic affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.24
H-Index - 18
eISSN - 1468-0270
pISSN - 0265-0665
DOI - 10.1111/ecaf.12408
Subject(s) - economics , complementarity (molecular biology) , economic freedom , decentralization , perspective (graphical) , per capita , government (linguistics) , monetary economics , macroeconomics , development economics , market economy , population , linguistics , philosophy , genetics , demography , artificial intelligence , sociology , computer science , biology
This article explores the association between money and long‐run economic growth in a panel of 27 countries over 200 years. It presents evidence of a complementarity between freedom and decentralisation of the monetary system in terms of their contribution to growth in GDP per capita. The significant and positive association between freedom and economic growth is found to be significantly stronger in a decentralised (market‐based) than in a centralised (government‐controlled) monetary system. For the average level of freedom across the 27 countries today, shifting from a centralised to a decentralised monetary system is predicted to almost double growth rates.