ABSTRACT
The relationship between financial development and economic growth has received an increasing amount of attention and has induced a lively debate from economists. Most students of the subject believe in long run financial system benefits, economic growth through mobilizing and pooling savings, diversifying investment risks, screening investment projects, facilitating exchange, monitoring managers and exerting corporate control, and so on. Empirical evidences also support the captioned arguments. (Goldsmith, 1969; McKinnon, 1973; Shaw, 1969; Stiglitz, 1985; Mayer, 1990; King and Levine, 1993a, 1993b; Beck and Levine, 2002.)
