Determining the relationship between financial development and economic growth: An application of ARDL technique to Singapore

Zaky Jailani and Abul Masih

MPRA Paper from University Library of Munich, Germany

Abstract: The relationship between financial development and economic growth has been subject to considerable debate in the literature of development and growth. While empirical studies often provide a direct relationship between financial development proxies and growth, much controversy remains about how these results should be interpreted. The study, therefore, attempts to unravel the causality direction of financial development and economic growth. We used an Autoregressive Distributed Lag (ARDL) method to assess the finance-growth relation taking Gross National Expenditure, Gross Fixed Capital Formation, exports, Foreign Direct Investments and Loans made to the Private Sector as financial development indicators for Singapore over the period from 1970 to 2013. Interestingly, we found that our financial development variables had no impact on economic growth.

Keywords: Financial development; Economic growth; ARDL; Singapore (search for similar items in EconPapers)
JEL-codes: C22 C58 E44 (search for similar items in EconPapers)
Date: 2015-06-16
New Economics Papers: this item is included in nep-mac and nep-sea
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Citations: View citations in EconPapers (2)

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