An Investigation of the Effectiveness of Financial Development in Pakistan
AbstractThis study attempts to discern the relationship between economic and financial development in Pakistan for the period 1973 - 2006. Vector error-correction modeling is used toidentify the causality between economic and financial development and the exogeneity of the variable(s) in the model. These error correction terms have been derived from Johansen’s multivariate cointegrating procedure. Results indicate that, in the long run, economic development causes financial development. Furthermore, the real output variable is found to beexogenous. Thus, financial development is seen to be ineffective in terms of economic development determination in Pakistan.
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Bibliographic InfoArticle provided by Department of Economics, The Lahore School of Economics in its journal Lahore Journal of Economics.
Volume (Year): 13 (2008)
Issue (Month): 2 (Jul-Dec)
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Web page: http://www.lahoreschoolofeconomics.edu.pk/EconomicsJournal/LJEIntro.aspx
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Economic Development; Financial Development; Causality.;
Find related papers by JEL classification:
- C59 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Other
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
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