Abstract
ABSTRACT The empirical literature on the nexus between finance and economic growth is vast, but two issues have been almost absent from it. One is the role of financial depth in communist countries with minimal market-oriented reforms. The other is the role of currency in circulation not only in these kinds of nations but also in underdeveloped countries, in general. This article investigates the nexus of banking deposits and currency in circulation with long-run economic growth in Cuba. We find a negative overall causality of deposits for economic growth. However, the currency was boosting growth. Our findings point at the relevance of currency for the private sector, and at multidimensional problems in the state-owned sector of Cuba.
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