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# Bank Financial Innovation Diffusion

## Definition

The process by which new banking practices and instruments spread throughout the banking system and economy, potentially enhancing efficiency and economic development. This diffusion can be accelerated or hindered by various factors.

## Source Chapter

Book II, Chapter 2

## Context

Smith discusses how banking innovations spread and their effects on economic development. He shows how successful innovations can significantly enhance banking efficiency and economic growth when widely adopted.

## Economic Domain

Accumulation

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