This chapter provides an outline of the endogenous growth theory. Endogenous or modern growth theory argues that financial intermediaries and securities markets allow business owners and investors to undertake innovative activities, which affects economic growth. Furthermore, other groups of studies that are concerned with issues like money creation, credit constraints, government interventions, and market failure are discussed in this chapter in parallel with endogenous growth theory. Later in the chapter, releasing the process of finance in different schools of thought including neo-classical, monetarist, Keynesians, and post-Keynesians is addressed. The discussion in the chapter ends with a review of the most commonly used indicators of financial market development, including but not limited to monetisation ratio, domestic credit availability, and stock market capitalisation.
The Limits of Surveillance and Financial Market Failure