Role of Banks in Innovation Development of Economy

Abstract

This paper examines the scientific method used to study numerous economic theories, including “neoclassical”, “monetarist”, “Keynesian”, “institutional”, & the idea of “financial intermediation”. The benefit of researching economic theory's application in the real world is understanding how it relates to banking activity. However, it does not provide a comprehensive historical analysis of all economic theories relating to the influence of the financial sector as well as its constituents on economic growth. The study of the relationship between advancements in the concept of financial intermediaries, the involvement of the banking industry, & trends in creation of “new paradigms” is highlighted by author. The article's goal is to examine the theoretical framework for determining banks' contributions to the financing of the economy's innovative development. The information used in research is based on scientific studies that were published as monographic studies and journal articles. These studies looked at how the government affected the “monetary system”, ‘interest rates”, “production”, “investment”, & “processes of the economy's reproduction”. Research approaches that take into consideration “dynamic functional relationship” between “current state of the whole”, development, & balancing of its “constituent elements” include logical generalisation, comparative analysis, and systems approach. The essay highlights how crucial it is to get banks to increase their involvement on the investment market. There is no widely acknowledged theory for identifying the position and function of bankers in the growth of a nation's economy, according to a critical study of development and research by eminent researchers. It has been determined that advocates of neoclassical theories of arbitration take the best positions with regard to defining the function of banks in reviving economic progress.