Finance, growth and human development: An Islamic economic development perspective

Md Akther Uddin and Abul Masih

MPRA Paper from University Library of Munich, Germany

Abstract: In a growing body of literature, importance of financial sector development and growth on human development has been emphasized but so far little empirical evidence to support this. Islam is a progrowth religion but the concept of development in Islam is multidimensional, understanding the relationship between finance, growth and human development would help us better explain and develop a sustainable pro-Islamic economic growth model, which would help eradicate mass poverty, income inequality and develop human capital in the Muslim world. This study aims to investigate how finance and growth affect human development in Malaysia from Islamic economic development perspective by using standard time series technique, ARDL. The study finds that there is a long term relationship between finance, growth and human development. Human development is found significantly correlated with the growth in the long run. It can be argued that financial development supports growth and growth ultimately promotes human development in the long run, also, macroeconomic stability is found significant for sustainable economic growth in Malaysia. However, oil price is found not correlated with growth in the long run for the Malaysian economy.

Keywords: economic growth; financial development; human development; ARDL (search for similar items in EconPapers)
JEL-codes: C22 C58 E44 (search for similar items in EconPapers)
Date: 2015-06-25
New Economics Papers: this item is included in nep-fdg, nep-gro, nep-mac and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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