Further evidence on finance-growth causality: A panel data analysis

Chrysost Bangaké () and Jude EGGOH ()

Economic Systems, 2011, vol. 35, issue 2, pages 176-188

Abstract: This paper reassesses the causal relationship between financial development and economic growth. Using recently developed panel methods on a data set of 71 developed and developing countries over the period 1960-2004, our study confirms previous results of a bidirectional causality between finance and growth. In addition, we show significant differences among country groups when considering both long-run and short-run causality. While in low and middle income countries there is no supportive evidence of short-run causality between financial development and economic growth, in high income countries economic growth significantly affects financial development.

Keywords: Financial; development; Economic; growth; Panel; causality; Panel; cointegration (search for similar items in EconPapers)
Date: 2011
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Persistent link: http://EconPapers.repec.org/RePEc:eee:ecosys:v:35:y:2011:i:2:p:176-188

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