Insurance–growth nexus and macroeconomic determinants: evidence from middle-income countries
Rudra P. Pradhan (),
Mak Arvin (),
Sahar Bahmani (),
Sara E. Bennett () and
John H. Hall ()
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Rudra P. Pradhan: Indian Institute of Technology
Sahar Bahmani: University of Wisconsin Parkside
Sara E. Bennett: Lynchburg College
John H. Hall: University of Pretoria
Empirical Economics, 2017, vol. 52, issue 4, No 8, 1337-1366
Abstract This paper examines the causal relationships between insurance market activities, economic growth, financial depth, and government consumption expenditure. We utilize a panel vector autoregressive model to test Granger causality for 18 middle-income countries over 1980–2012—a group that has not been previously studied in this literature. The results show a robust long-run economic relationship between insurance market activities, economic growth, financial depth, and government consumption expenditure. Moreover, in the short run, we find bidirectional causality between financial depth and economic growth, between financial depth and government consumption expenditure, and between insurance market activities and government consumption expenditure. Unidirectional causality exists from insurance market activities to economic growth, from financial depth to insurance market activities, and from government consumption expenditure to economic growth.
Keywords: Insurance market activities; Economic growth; Financial depth; Government consumption expenditure; Middle-income countries (search for similar items in EconPapers)
JEL-codes: L96 O32 O33 O43 (search for similar items in EconPapers)
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