THE ROLE OF THE FINANCIAL SYSTEM IN OVERCOMING THE UNEVEN REGIONAL DEVELOPMENT OF A COUNTRY

Анотація

This study utilizes a simple endogenous growth model and extends it to the case of two re-gions linked through their financial sectors. We model the influence of the financial development on the regional growth and extend the model for the multiple-region case to enable the empirical analysis using data on the US states. Despite our interest in uneven regional growth in develop-ing countries, the model is best tested using data from the regions of developed countries. These countries have accumulated sufficiently detailed and consistent data. In this study, I pro-pose to use US state-level data. The specific historic development of the regional banking in US, particularly the restrictions on intrastate and interstate banking, created regionally distinct banking systems.

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