201. Financial Development and Economic Growth in European Countries: Bootstrap Causality Analysis
- Author:
- Fuat Lebe
- Publication Date:
- 01-2016
- Content Type:
- Journal Article
- Journal:
- The Rest: Journal of Politics and Development
- Institution:
- Centre for Strategic Research and Analysis (CESRAN)
- Abstract:
- In the present study, it was investigated whether there was a causality relationship between financial development and economic growth for sixteen European countries. Data from the period of 1988-2012 was analyzed using the bootstrap panel causality test, which takes cross-section dependence and heterogeneity into account. The results of the test showed that there was a strong causality relationship between financial development and economic growth in European countries. In European countries, there was a causality relationship from economic growth to financial development and from financial development to economic growth. These results support both the supply-leading and the demand-following hypotheses. Therefore, it can be said that the feedback hypothesis is valid for European countries.
- Topic:
- Development, Regional Cooperation, Economic Growth, and Financial Development
- Political Geography:
- Europe