Finance and the financial system are key components in the workings of a capitalist market economy and of capitalist firms. The absence of finance, or an inefficient financial system, may be detrimental to economic growth and development, which is often the case for poor and developing regions. This entry reviews in the first instance debates over the direction of causality of finance in driving economic growth and development. It then considers global financial integration, including special topics such as Islamic finance and the rise of sovereign wealth funds. The entry concludes with a discussion of financial exclusion and microfinance.
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