This work contains original contributions on the theory of the relationship between financial development and economic growth.

Niels Hermes is a Post-doctorate Research Fellow in the Department of Economics at Groningen University, The Netherlands. His recent work has been directed at analysing the role of domestic finance markets in the process of economic development. Previously, he has also done research into the causes and consequences of the international debt crisis and of capital flight. Robert Lensink is Assistant Professor in Economics, also at Groningen University. His area of specialisation is economic development, and he has made special reference to the effects of financial flows on developing countries. His two most recent books are Structural Adjustments in Sub-Saharan Africa (Longman) and (with Kanhaya Gupta) Financial Liberalization and Investment (Routledge).

INTRODUCTION 1 MODELS OF FINANCIAL DEVELOPMENT AND GROWTH: A SURVEY OF RECENT LITERATURE Part 1 Theoretical and empirical issues in financial development and economic growth 2 DEMAND-DRIVEN FINANCIAL DEVELOPMENT 3 ENDOGENOUS GROWTH WITH FINANCIAL CONSTRAINT 4 FINANCIAL DEVELOPMENT, POLICY AND ECONOMIC GROWTH 5 FINANCIAL MARKETS AND ENDOGENOUS GROWTH: AN ECONOMETRIC ANALYSIS FOR PACIFIC BASIN COUNTRIES 6 FINANCIAL INDICATORS AND ECONOMIC EFFICIENCY IN DEVELOPING COUNTRIES 7 FINANCE AND GROWTH IN PACIFIC BASIN DEVELOPING COUNTRIES Part 2 Issues on financial policies in developing countries 8 FINANCIAL SECTOR POLICIES: ANALYTICAL FRAMEWORK AND RESEARCH AGENDA 9 INTEREST RATE DEREGULATION AND INVESTMENT: A SIMULATION STUDY 10 DEPOSIT MOBILISATION THROUGH FINANCIAL RESTRAINT 11 THE FINANCIAL SYSTEM AND PUBLIC ENTERPRISE REFORM: CONCEPTS AND CASES 12 FINANCIAL LIBERALISATION AND FINANCIAL FRAGILITY: THE EXPERIENCES OF CHILE AND INDONESIA COMPARED 13 FINANCIAL REFORM AND FINANCIAL INTERMEDIATION IN CHILE, 1983-1992 14 RESOURCE MOBILISATION IN THE CARIBBEAN COMMUNITY