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| Article Name : | | | BANKS ARE CATALYST OF GROWTH: AN ANALYSIS OFNATION AND STATE OF GUJARAT | | Author Name : | | | Nasheman Bandookwala | | Publisher : | | | Ashok Yakkaldevi | | Article Series No. : | | | GRT-5445 | | Article URL : | |  | Author Profile View PDF In browser | | Abstract : | | | Theoretical and empirical research has shown that a sound and effective financial system is inevitable for economic growth and eventually development. Initially, politicians and economists emphasized the importance of the financial system for the rise of capitalism, industrialization, and economic development. Smith (1776) pointed out the role of money in lowering transaction costs, thus permitting greater specialization, and fostering technological innovation. Alexander Hamilton (1781), argued that “banks were the happiest engines that ever were invented” for spurring economic growth. Joseph Schumpeter (1911) argued that financial intermediaries play a pivotal role in economic development because they choose which firms get to use society’s savings. | | Keywords : | | |
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