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That financial matters did not constrain industrial takeoff in the UK is generally accepted in the historical literature; in contrast, contemporary empirical analyses have found evidence that financial development can be a causal determinant of economic growth. The authors look to reconcile these findings by concentrating on a particular aspect of industrialising UK where inefficiencies in finance could have had bite: the finance of physical infrastructures. They document the historical record and develop the importance of spatial disaggregation and spillovers in both technological and financial development. They develop a simple model that captures the nature of infrastructure finance within a theory of endogenous growth where financial costs are endogenous.
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