The financial-led growth hypothesis suggests that the financial development of a country plays a major role in its economic growth. Several channels through which financial development promotes growth in the economy include efficient allocation of capital, mobilization of savings through...

An openness-led growth hypothesis investigates the causal relationship between trade openness1 and economic growth. Indeed, trade openness can stimulate economic growth by enhancing the international flow of knowledge and innovation and by allowing economies of specialization, not only in the...