In typical cyclical fashion, the unemployment rate has lagged the pickup in demand somewhat, but it has remained between 5-1/2 and 5-3/4 percent of late, after rising rapidly in 2001. Over the longer haul, incomes and spending are driven most importantly by the behavior of labor productivity. And here the most recent readings have been very encouraging.
Let us consider how financial deepening can address concerns of growth with equity and ensure pro-poor growth. Financial sector development and deepening drives economic growth by mobilizing savings and investing in the growth of the productive sectors. The institutional infrastructure of the financial system contributes to reducing information, contracting and transaction costs, which in turn accelerates economic growth and promotes pro-poor growth.