Exploring the causality between economic growth, financial development and inflation in sixteen high-income countries

Fuinhas, José Alberto; Koengkan, Matheus; Belucio, Matheus

doi:10.19093/res11094

Cited by 4 publications

(4 citation statements)

References 38 publications

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“…The supply-leading hypothesis (Schumpeter, 1912;Christopoulos & Tsionas, 2004;Küçüksakarya, 2021) is supported, meaning that the capital allocation provided by private banks, the more liquid stock markets, the banking efficiency, and the stability of the financial system can lead to economic growth. Moreover, the two-way causality between bank assets, liquid liabilities, non-performing loans, and economic growth is consistent with the findings of Demetriades and Hussein (1996), Al-Yousif (2002), Apergis et al (2007), Pradhan et al (2018) and Fuinhas et al (2020). In other words, the expansion and stability of the banking system can lead to economic growth, and the level of economic activity can lead to an increase in the size and stability of the banking sector.…”

Section: Discussionsupporting

confidence: 85%

“…More recently, two additional hypotheses have been identified in the literature. The hypothesis of feedback causality, meaning the existence of two-way causality between financial development and economic growth (Demetriades & Hussein, 1996;Apergis et al, 2007;Al-Yousif, 2002;Calderón & Liu, 2003;Kar et al, 2011;Swamy & Dharani, 2018, Fuinhas et al, 2020Nguyen et al, 2021). Finally, the neutrality hypothesis supposes the absence of causality between financial and economic growth and the role of finance in economic growth is overemphasized (Lucas, 1988;Shan et al, 2001;Hsueh et al, 2013;Stolbov, 2017).…”

Section: Introductionmentioning

confidence: 99%

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Causality between financial development, economic growth, and income inequality in EU countries

Sotiropoulou¹,

Γεωργόπουλος

Giakoumatos

2022

Int. J. Appl. Res. Manag. Econ.

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This study investigates the causality between financial development, economic growth, and income inequality using panel data for 23 European Union countries over the period 1987-2017. Various proxies of financial development are chosen to represent the depth, efficiency, and stability of the banking system and stock markets. For the empirical analysis, the study performs the Granger non-causality test in heterogeneous panels. The findings are contradictory and sensitive to the measures of financial development. Most importantly, the results reveal a one-way causality from financial development to economic growth when private credit, stock market capitalization, net margin interest rate, and Z-score are chosen as financial development indicators. In addition, a two-way causality exists between bank assets, liquid liabilities, non-performing loans, and economic growth, and a one-way causality from economic growth to value traded and turnover ratio. However, the results show no causality between stock price volatility and economic growth. The results indicate a one-way causality running from income inequality to economic growth. Finally, a one-way causality runs from income inequality to financial development for most measures of financial development except for a one-way causality running from private credit to income inequality, a two-way causality between bank assets and inequality, and an absence of causality between income inequality and turnover ratio, Z-score and stock price volatility.

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Section: Discussionsupporting

confidence: 85%

Section: Introductionmentioning

confidence: 99%

Causality between financial development, economic growth, and income inequality in EU countries

Sotiropoulou¹,

Γεωργόπουλος

Giakoumatos

2022

Int. J. Appl. Res. Manag. Econ.

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“…So the wireless network is data centric [12]. (5) Resources are limited to most currently deployed in environmental monitoring, whose nodes are stationary, especially in areas where poor environment or humans cannot reach, and it is unrealistic to recharge the nodes [13].…”

Section: Empirical Research Methods Of the Relationship Between Financial Development And Economic Growth Based On Intelligent Algorithmsmentioning

confidence: 99%

Empirical Study of the Relationship between Financial Development and Economic Growth Based on Intelligent Algorithms Based on Wireless Network Communication

Xie

Cao

2021

Mobile Information Systems

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In order to discuss a series of issues surrounding financial development and economic growth, it makes it more meaningful to discuss regional financial development and economic growth. This article aims to study the empirical study of the relationship between financial development and economic growth based on intelligent algorithms based on wireless network communication. In this article, a two-side positioning model is established, and the optimal solution is found for the feasible region through the particle swarm optimization algorithm. After two anchor nodes are realized, the position of the unknown node can be calculated. In addition, this article uses the Shadowing model to calculate the distance between wireless network nodes. This model is composed of path loss and occlusion factors, which can fully consider the impact of environmental factors on the signal. Experimental research data show that the improved algorithm has a positioning coverage close to 100% when the anchor node density is 30%. The improved algorithm in this article speeds up the convergence speed than positioning algorithm 1 and reduces the time by about 35%. Although the running time of the algorithm in this article is longer than that of positioning algorithm 2, the overall positioning accuracy is higher than that of the positioning algorithm, which is about 20% higher.

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“…Furthermore, the results confirmed that the current development of the financial sector is significantly positively influenced by the policies implemented in the previous period. Fuinhas et al (2021) used Granger causality assessments based on a panel vector autoregressive framework, as well as mechanism impulse response functions, to examine the relationships between economic growth, inflation, stock market development, and banking sector development in sixteen high-income countries from 2001 to 2016. Their findings indicate a two-way relationship between financial progress and inflation.…”

Section: Financial Development and Inflation Ratementioning

confidence: 99%

Growth, Unemployment and Inflation in Sub-Saharan Africa: The role of Financial Development and legal systems and Property Rights

Salifu,

Peprah,

Cantah

2024

Preprint

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Sub-Saharan Africa faces many challenges,such as poverty, inequality, conflict, corruption, and weak institutions. However, it also has potential for economic growth and development due to its abundant natural resources, young population, and increasing global integration. Thisstudy examines the impact of financial development on economic growth, unemployment, and inflation in sub-Saharan Africa. It also investigates the moderating effects of property rights and legal systems. The study uses panel data from 41 sub-Saharan African countries covering the years 2000–2020 and employs the smoothed sequential quantile regression technique for the empirical analysis. The findings show that at the 25th, 50th, and 75th quantiles, financial development has a positive effect on economic growth and unemployment, while it has a negative effect on inflation. These results highlight the importance of financial development for promoting economic prosperity and stability in the region. Employment increases while inflationand economic progressexpand when property rights interact with legal systems. Sturdy institutions and law structures are key to tapping into financial growth's full potential for jobs, prices, and expansion. The study showedthat lawmakers should bolster law frameworks and property rights enforcement, limit corruption, guard property rights, and improve transparency while supporting financial growth. This study underscores how vital is sub-Saharan Africa's need to grow capital markets, diversify, and enable financial inclusion.

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Exploring the causality between economic growth, financial development and inflation in sixteen high-income countries

Cited by 4 publications

References 38 publications

Causality between financial development, economic growth, and income inequality in EU countries

Causality between financial development, economic growth, and income inequality in EU countries

Empirical Study of the Relationship between Financial Development and Economic Growth Based on Intelligent Algorithms Based on Wireless Network Communication

Growth, Unemployment and Inflation in Sub-Saharan Africa: The role of Financial Development and legal systems and Property Rights

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