This study explores the finance and economic growth nexus in G‐7 economies as these countries experience significantly higher levels of financial development. Using a balanced panel of 31 years from 1983 to 2013, we provide new evidence on the finance–growth relationship. We show the presence of nonlinearity as there is an inverted U‐shaped relationship between finance and growth in the long run. Estimating the thresholds in the finance–growth nexus, we notice that there exists a threshold effect of finance at 109% of Gross Domestic Product (GDP). We observe that exceeding the threshold would hinder the countries instead of furthering economic growth as too much finance is harmful. Based on the panel Granger causality test results, we claim that financial development should be associated with optimal growth performance. Our findings for the G‐7 economies offer some useful policy inferences to the emerging and developing economies in designing their financial development strategies.

中文翻译：

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金融与增长联系的阈值：来自七国集团经济的证据

本研究探讨了七国集团（G-7）经济体的金融和经济增长关系，因为这些国家的金融发展水平明显较高。使用从1983年到2013年的31年的平衡小组，我们提供了关于金融与增长关系的新证据。我们显示出非线性的存在，因为从长远来看，金融与增长之间存在倒U型关系。在估计金融与增长联系的门槛时，我们注意到存在着一个门槛效应，即金融对国内生产总值（GDP）的109％的影响。我们观察到，超过这一门槛将阻碍各国而不是促进经济增长，因为过多的金融是有害的。根据小组的格兰杰因果关系测试结果，我们认为金融发展应与最佳增长绩效相关联。