TY  - JOUR
AU  - Rousseau,Peter L.
AU  - Sylla,Richard
TI  - Emerging Financial Markets and Early U.S. Growth
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7448
PY  - 1999
Y2  - December 1999
UR  - http://www.nber.org/papers/w7448
L1  - http://www.nber.org/papers/w7448.pdf
N1  - Author contact info:
Peter L. Rousseau
Department of Economics
Vanderbilt University
VU Station B #351819
2301 Vanderbilt Place
Nashville, TN 37235-1819
Tel: 615/343-2466
E-Mail: peter.l.rousseau@vanderbilt.edu

Richard Sylla
Stern School of Business, Economics
New York University
44 West 4th Street
New York, NY 10012-1126
Tel: 212/998-0869
Fax: 212/995-4218
E-Mail: RSYLLA@STERN.NYU.EDU
AB  - Studies of early U.S. growth traditionally have emphasized real-sector explanations for an acceleration that by many accounts became detectable between 1815 and 1840. Interestingly, the establishment of the nation's basic financial structure predated by three decades the canals, railroads, and widespread use of water and steam-powered machinery that are thought to have triggered modernization. We argue that this innovative and expanding financial system, by providing debt and equity financing to businesses and governments as new technologies emerged, was central to the nation's early growth and modernization. The analysis includes a set of multivariate time series models that relate measures of banking and equity market activity to measures of investment, imports and business incorporations from 1790 to 1850. The findings offer support for our hypothesis of  finance-led' growth in the U.S. case. By implication, the interest today in improving financial systems as a means of fostering sustainable growth is not misplaced.
ER  -