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Causal Relationship between Financial Development and Economic Growth:A Case Study - Relazione causale tra sviluppo finanziario e crescita economica: studio di un caso

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Abstract

This paper empirically investigates the causal relationship between financial development and economic growth in Jamaica covering the period 1980-2012. The empirical results suggest there is bi-directional causality between financial development and economic growth in Jamaica. This empirical result is consistent with the McKinnon-Shaw hypothesis in the long run. The result further supports the hypothesis that finance is a leading sector in the growth process in Jamaica and implies that strong liquidity in the form of bank lending and volume is an important indicator of economic growth. - Questo studio esamina empiricamente la relazione causale tra sviluppo finanziario e crescita economica in Giamaica nel periodo 1980-2012. I risultati empirici suggeriscono che c’è una causalità bi-direzionale tra sviluppo finanziario e crescita economica in questo paese. Questo risultato empirico è coerente con l’ipotesi di McKinnon e Shaw per il lungo periodo. Inoltre questo risultato sostiene la tesi che la finanza è il settore principale del processo di crescita in Giamaica e implica che una forte liquidità, anche sotto la forma di credito bancario, è un indicatore importante della crescita economica.

Suggested Citation

  • Francis, Brian M., 2013. "Causal Relationship between Financial Development and Economic Growth:A Case Study - Relazione causale tra sviluppo finanziario e crescita economica: studio di un caso," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 66(4), pages 439-453.
    • Handle: RePEc:ris:ecoint:0699
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    Keywords

    Financial Development; Economic Growth; Causality; Vector Autoregression; McKinnon-Shaw Hypothesis; Jamaica;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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