Stock market and economic growth in Eastern Europ
María Prats () and
Beatriz Sandoval ()
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Beatriz Sandoval: Universidad de Murcia
No 16-09, Working Papers from Asociación Española de Economía y Finanzas Internacionales
A developed financial system is essential in a market economy. Similarly, economic growth is very important for institutions and economic policy. This paper studies the importance of the development of financial markets in general, and stock market in particular, from the review of existing literature in the area of the relationship between financial development and economic growth, and especially, the link between stock market and economic growth. Through an empirical analysis for six countries in Eastern Europe (Bulgaria, Slovakia, Hungary, Poland, Czech Republic and Romania), it is tried to show the link between the development of stock market and economic growth in these countries from 1995 to 2012 in order to deep in their transition processes, from communist to market economies, that began with the fall of the Berlin Wall in 1989. The results show evidence of Granger causality with economic growth variables and financial market variables.
Keywords: Present value model; economic growth, stock market, financial markets, financial developmen (search for similar items in EconPapers)
JEL-codes: F43 O16 G2 (search for similar items in EconPapers)
Pages: 33 pages
New Economics Papers: this item is included in nep-fdg, nep-sog and nep-tra
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Working Paper: Stock market and economic growth in Eastern Europe (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:aee:wpaper:1609
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