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The Impact Of Financial Development And Stability On Human Development

Author

Listed:
  • ALI AWDEH

    (Faculty of Economics and Business Administration, Lebanese University, Lebanon)

  • RIMA ASSAF

    (School of Business, American University in Dubai, UAE)

  • FADI GHOSN

    (School of Business, Lebanese International University, Lebanon)

Abstract

The role of financial systems in sustainable development has become the center of global and national interest and development strategies, and more developed and stable financial systems are the cornerstones for development finance and for achieving the Sustainable Development Goals. This research aims at examining the impact of financial development and stability on human development in a sample of 185 countries over the period 1990–2019. This study adopts as the primary empirical methodology, the Panel Data Econometrics (Fixed Effects and Random Effects Methods), and for the robustness test, a Dynamic GMM system. To proxy for human development, it exploits the UNDP’s Human Development Index and its three sub-indices (Education, Income, and Life expectancy), while it adopts broad money, credit to the domestic private sector, and banking sector deposits (all as a percentage of GDP) to proxy for financial development. Moreover, it represents financial stability by the banking sector Z-score and a dummy variable representing crises. The empirical results reveal the prevailing role of development and stability in the financial systems on human development and its three sub-components, regardless of the country’s economic development level.

Suggested Citation

  • Ali Awdeh & Rima Assaf & Fadi Ghosn, 2023. "The Impact Of Financial Development And Stability On Human Development," Global Economy Journal (GEJ), World Scientific Publishing Co. Pte. Ltd., vol. 23(01n04), pages 1-25, December.
    • Handle: RePEc:wsi:gejxxx:v:23:y:2023:i:01n04:n:s2194565924500052
    DOI: 10.1142/S2194565924500052
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    More about this item

    Keywords

    Sustainable development goals; financial development; human development;
    All these keywords.

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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