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Capital Markets: An Engine for Economic Growth

Catalyst Monograph Series, 1995.

Geert Bekaert
Stanford University, Stanford, California, USA 94305
National Bureau of Economic Research, Cambridge, Massachusetts, USA 02138

Campbell R. Harvey
Duke University, Durham, North Carolina, USA 27708
National Bureau of Economic Research, Cambridge, Massachusetts, USA 02138

This paper provides a roadmap to the latest developments on the links between financial markets and economic growth with a special emphasis on the stock market and capital market integration. We provide some empirical analysis relating the development of financial markets to economic growth rates. Our paper comes at an opportune time given the recent interest among the investment community in emerging markets and the enthusiasm of a number of countries to launch capital markets for the first time.