The evolution of debt and equity markets in economic development

John H. Boyd, Bruce D. Smith

Research output: Contribution to journalArticlepeer-review

162 Scopus citations


As noted by Gurley and Shaw, there is a typical pattern of economic development in which the evolution of the financial system is an essential aspect of the growth process. We focus on one component of this evolution: the increasing importance of equity markets as an economy grows. We develop a growth model where capital accumulation is financed externally through a combination of debt and equity. We illustrate why equity market activity might grow - often very rapidly - as an economy develops. We also illustrate why access to equity markets may not be needed in the early stages of economic development.

Original languageEnglish (US)
Pages (from-to)519-560
Number of pages42
JournalEconomic Theory
Issue number3
StatePublished - 1998


  • Development
  • Finance
  • Growth


Dive into the research topics of 'The evolution of debt and equity markets in economic development'. Together they form a unique fingerprint.

Cite this