Do Stock Markets Promote Economic Growth?

Nauro Campos, Jan Hanousek and Randall Filer

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague

Abstract: One of the most enduring debates in economics is whether financial development causes economic growth or whether it is a consequence of increased economic activity. Little research into this question, however, has used a true causality framework. This paper fills this lacuna by using Granger-causality tests and finds little evidence of a causal relationship going from stock market development to economic growth. We do find evidence that stock market development can cause currency appreciation, which may confound studies that use dollar denominated measures of economic growth.

Keywords: Stock market; financial development; economic growth; Granger causality. (search for similar items in EconPapers)
JEL-codes: F36 G00 G14 O16 (search for similar items in EconPapers)
Date: 1999-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

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Related works:
Working Paper: Do Stock Markets Promote Economic Growth? (2001)
Working Paper: Do Stock Markets Promote Economic Growth (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:cer:papers:wp151

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