The growth of non-monetary financial intermediaries in the New Zealand economy, 1922-1960

Abstract

Since Dr. Raymond W. Goldsmith published his work in two separate books on the study of long-term growth of financial intermediaries, economists began to pay special attention to this field of study R.W. Goldsmith, “The Share of Financial Intermediaries in the National Wealth”. Gurley and Shaw realised the inadequacy of the traditional economic model based on money, bonds, and output; while the financial assets, other than money, are left out of its analysis See J.G. Gurley and E.S. Shaw, “Financial Aspect of Economic Development”, American Economic Review, September 1955. Further, they pointed out that as a result of so much attention on the growth of real income or output, investment, consumption and saving, the financial aspect of economic development was relatively neglected. They believe that economic development is likely to result in the growth of financial debts. So, where there is a growth in the real income, it is very likely to generate a special kind of by-product - financial debts - within the economic system.