Financial literacy and its benefits on a household, corporate and macroeconomic level

Financial literacy has become a more frequently discussed topic, particularly in the United States. There is a general view that improvements of financial literacy should take place. However, supportive research has major shortcomings. Some of them are discussed in this paper, some findings as well. It is striking that research on improved financial literacy so far hardly has dealt with the corporate and the macroeconomic level. There is no doubt about the need to improve individuals' financial literacy. But who should be responsible for improving literacy in private households? Can efficacy be measured? Should the corporate sector - apart from the financial industry - care about financial literacy? One conclusion of this paper is that there are various benefits in this respect. There are also macroeconomic benefits from improved financial literacy. This paper pleads for much more research, particularly related to emerging countries. The inadequacy - or the absence - of statistics in financial literacy matters makes it difficult to get an empirical framework for more profound analysis and statistical correlations. However, the fact that the chairman of the Federal Reserve System in the U.S. personally is engaged in increasing financial literacy should be evidence enough that the topic is important. This paper has three main objectives. First, is to demonstrate the importance of improved financial literacy by finding examples and perspectives that so far have not been used in the limited academic literature on this topic. Second, it seems logical to extend the analysis of improved financial literacy from private households to the corporate and municipal sectors and, to try to reach macroeconomic conclusions. One can find a link between microeconomic financial literacy parameters such as intellectual capital formation, knowledge management and the informing of employees and the general public about these issues. Eventually, macroeconomic growth and welfare in a country will benefit. Third, some really new results and figures are presented in this paper. This is done by means of a survey of around 60 experts in the field of finance and economic research from around the world - experts that are internationally well-known practitioners or academics - in other words producers of research and information who aim at the improvement of financial literacy. It should be added that this topic should be very relevant for emerging markets as well.