We provide new micro evidence on the relationship between financial development and welfare. Relying on the concept of local financial development, our analysis focuses on two dimensions of household welfare: investment and consumption. The results show that financial development is associated...

It appears to be common wisdom that the basic cause of Thailand's crisis is its extraordinarily weak financial institutions. The article questions this proposition from an empirical viewpoint. It is argued that the facts provided can be better explained in a framework of system change than by...