FINANCIAL INTERMEDIATION, ENTREPRENEURSHIP AND ECONOMIC GROWTH
financial intermediation, entrepreneurship, economic growth
This paper presents a simple general equilibrium model of financial intermediation, entrepreneurship and economic growth. In this model, the role of financial intermediation is to pool savings and to lend the pooled funds to an entrepreneur, who in turn invests the funds in a new production technology. The adoption of the new production technology improves individual real income. Thus financial intermediation promotes economic growth through affecting individualsâ€™ saving behaviour and enabling the adoption of a new production technology.