Stephen Cecchetti and Enisse Kharroubi in Vox EU:
Why growth in finance is a drag on the real economy: A booming financial sector means economic growth. Or does it? This column presents new evidence showing that when the financial sector grows more quickly, productivity tends to grow disproportionately slower in industries with either lower asset tangibility or in industries with higher research and development intensity. It turns out that financial booms are not, in general, growth-enhancing.