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Survey of Effects of Financial Development and Quality of Institutions on Irans Economic Growth by ARDL Model

Author

Listed:
  • Alireza Erfani
  • Hedayat Mehralitabar
  • Smaeil Shamsiyan

Abstract

This study examined the quality of institutions and financial development, and the interaction of financial development and institutions on economic growth in the short run and long run by using of Auto Regressive Distributed Lag (ARDL) model during the period of 1981-2013. Thus, this study adopts the framework introduced by Mankiw, Romer and Weil (1992) that expanded with the addition of institution variables. The results of estimation equations shows that financial development in the long run has meaningfully positive effect on real GDP per capita. But when combined with the quality of the institution will be a negative influence. This means that when the financial development causes to economic growth which the context of appropriate institutional quality is formed.

Suggested Citation

  • Alireza Erfani & Hedayat Mehralitabar & Smaeil Shamsiyan, 2015. "Survey of Effects of Financial Development and Quality of Institutions on Irans Economic Growth by ARDL Model," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 4(4), pages 231-243.
    • Handle: RePEc:rss:jnljee:v4i4p4
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