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

Brian M. Francis ()
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Brian M. Francis: Department of Economics University of the West Indies, Postal: Cave Hill Campus, P.O. Box 64 - Bridgetown, Barbados, http://cavehill.uwi.edu/

Economia Internazionale / International Economics, 2013, vol. 66, issue 4, 439-453

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.

Keywords: Financial Development; Economic Growth; Causality; Vector Autoregression; McKinnon-Shaw Hypothesis; Jamaica (search for similar items in EconPapers)
JEL-codes: C32 O11 O54 (search for similar items in EconPapers)
Date: 2013
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