标题：The effect of financial development on economic growth and income distribution: an empirical evidence from lower-middle and upper-middle-income countries
期刊名称：Development Studies Research: An Open Access Journal
电子版ISSN：2166-5095
出版年度：2022
卷号：9
期号：1
页码：117-128
DOI：10.1080/21665095.2022.2065325
语种：English
出版社：Taylor and Francis Ltd
摘要：Financial development and its relationships with economic growth and income inequality have recently received considerable attention. The present study investigates the relationships between financial development and (i) economic growth, using data from 44 countries; (ii) economic inequality, using data from 42 middle-income countries. Estimates are obtained through a panel Autoregressive Distributed Lag (ARDL) model for a period of 23 years (1995-2018). Results reveal that financial development contributes to economic growth in both groups of countries in the long run. However, the contribution financial development makes to economic growth is more noticeable in the case of upper-middle income countries. Additionally, Granger causality test based on Vector Error Correction (VEC) showed two-way Granger causality between financial development and economic growth. Findings disclosed an inverted U-shaped association between financial development and income inequality for both lower-middle income and upper-middle income countries. This study can aid policymakers in designing policies that can strengthen financial systems, thereby enhancing economic growth and reducing income inequality.
