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Quantitative Reassessment of the Financial Development–Growth Nexus: Application of ARDL and VDCM Models (in Persian)

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Listed:
  • Mohammadi, Frozan

    (Iran)

  • Solaymani, Saeed

    (Iran)

  • Solaymani, Mohammad

    (Iran)

Abstract

This study is a quantitative reassessment of the effects of financial development on Iran’s economic growth within the period of 1973-2007 using both Autoregressive Distributed Lag (ARDL) and Variance Decomposition (VDCM) approaches. The empirical results reveal that the financial development has a significant and positive impact on shot-run and long-run economic growth. The shot-run and long-run elasticity of the real GDP to financial development are very little, indicating its very low sensitivity to shot-run and long-run changes of financial development though its long-run elasticity is higher than the short-run one.

Suggested Citation

  • Mohammadi, Frozan & Solaymani, Saeed & Solaymani, Mohammad, 2011. "Quantitative Reassessment of the Financial Development–Growth Nexus: Application of ARDL and VDCM Models (in Persian)," The Journal of Planning and Budgeting (٠صلنامه برنامه ریزی Ùˆ بودجه), Institute for Management and Planning studies, vol. 15(2), pages 113-139, January.
    • Handle: RePEc:auv:jipbud:v:15:y:2011:i:2:p:113-139
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