For instance, Robert Lucas asserted in 1988 that economists badly over-stress the role of financial factors in economic growth. Moreover, Nobel laureate Joan Robertson declared in 1952 that “where enterprise leads, finance follows”. According to this view, economic development creates demands for particular types of financial arrangements, and the financial system responds automatically to these demands. 4.
The well-known former editor of “The Economist” Walter Bagehot expressed this in 1873 as follows “In England, however, ... capital runs as surely and instantly where it is most wanted, and where there is most to be made of it, as water runs to find its level”. 5. However, it is now increasingly accepted that financial development has a positive effect on growth.