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Further Evidence on the Link between Finance and Growth: An International Analysis of Community Banking and Economic Performance

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The central problem of life-cycle finance is the spreading of the income fromthe economically productive part of an individual’s life over that person’s whole life.As with all financial problems, this task is made difficult by time and uncertainty.Merely setting aside a portion of one’s income for later use does not mean that itwill be there—in real (inflation-adjusted) terms—when it is needed. No investmentis riskless if the “run” is long enough. In addition, there is the ordinary risk that therealized return will be lower than the expected return. Finally, no one knows howlong he or she is going to live. The...
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Further Evidence on the Link between Finance and Growth: An International Analysis of Community Banking and Economic Performance

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