In much of the developed world, economic productivity seems to correlate strongly with availability of free capital (I don't have a source but I imagine it's fairly straightforward to cook one up). Even US vs Europe, kind of similar economies, but with capital so much easier to come by in the US, and US productivity per capita is flying compared to Europe.
Availability of free capital is a function of both just general wealth of a society, and how well lubricated the wheels of finance are.
I don't think this is a controversial theory, even if it comes with unpleasant side effects (white collar crime, inequality etc). Just as having a buoyant defence industry that can churn out a lot of boom is great for a country's war fighting potential.
It's essentially the willingness of a society to fund what looks like and could actually be a complete waste of time and money.
In the US there's plenty of money to throw on seemingly frivolous pursuits, because stagnant money is generally considered wasted money. It's considered better to have that money "working for you" invested in something, anything. You could lose out, you could also win big, at least you tried. Can't have omelets without cracking eggs, as the saying goes.
Another Europe-like example is Japan: A rich society with lots of money, but society doesn't want to waste it. So most of the money is stagnant, stored in deposit accounts or in a bedroom drawer (literally, see: Tansu Yokin[1]) instead of being invested in something consequently leading to a stagnant economy.
Money in a drawer doesn't really detract from any national investment. It's just paper.
It's the allocation of capital that matters. Land, machinery, and so on.
The extent of this is that if money sits in drawers not being spent, it represents diminished demand, which suppresses prices; the government can then print a corresponding amount of money to allocate capital towards other purposes. Leaving money in the drawer means delaying until another day your vote for how national resources should be allocated.
Availability of free capital is a function of both just general wealth of a society, and how well lubricated the wheels of finance are.
I don't think this is a controversial theory, even if it comes with unpleasant side effects (white collar crime, inequality etc). Just as having a buoyant defence industry that can churn out a lot of boom is great for a country's war fighting potential.