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Panel Granger Causality Between Financial Development and Economic Growth

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  • Cândida Ferreira

    (ISEG, UL – Lisbon School of Economics and Management of the Universidade de Lisboa)

Abstract

This paper uses panel Granger causality estimations with the approaches developed by NairReichert and Weinhold (2001), and Bangake and Eggoh (2011) as well as the Dumitrescu and Hurlin (2012) test, with the algorithm developed by Lopez and Weber (2017), to analyse the causality relations between all the nine IMF financial development indices, and the real GDP growth considering a sample of 46 countries spread by all continents over the interval 1990-2017. The results obtained reveal the dynamic character of these causality relations and overall,no significant differences were found when comparing the results obtained for the financial institutions indices with those regarding the financial markets indices. The results confirm the existence of bidirectional causality, although not with the same statistical robustness for all the IMF indices, addressing relevant aspects of the financial development: access, depth and efficiency of the financial institutions and markets.
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Suggested Citation

  • Cândida Ferreira, 2021. "Panel Granger Causality Between Financial Development and Economic Growth," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 27(4), pages 333-335, November.
    • Handle: RePEc:kap:iaecre:v:27:y:2021:i:4:d:10.1007_s11294-022-09838-7
    DOI: 10.1007/s11294-022-09838-7
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    2. He, Jiao & Deng, Zhenghua, 2023. "Revisiting natural resources rents and sustainable financial development: Evaluating the role of mineral and forest for global data," Resources Policy, Elsevier, vol. 80(C).

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    More about this item

    Keywords

    C33; E02; E44; F43; G20; O43;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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