Occupying the Wrong Street? The Social Productivity of the Financial Sector: Some Comments

AbstractWe have before us in the session three different and yet complementary “takes” on what is meant by the social productivity of the financial sector, and three calls, directly or indirectly, for further research. Ross Levine looks at the ways that finance adds to social welfare by contributing to growth and income equality and analyzes the evidence. Alexander Popov adds another variable of possible concern, the volatility of the growth process, surely an important issue in the tumultuous wake of one of the worst financial crises of all time. Josh Lerner, in his paper with Peter Tufano, is concerned about the role of financial innovation and whether it makes our lives better or worse. All three papers are worth your attention…