Open AccessFinancial Development and Economic Growth: Time Series Analysis of Economy of Pakistan
Author(s) -
Muhammad Shoukat Malik,
Raisham Hayee,
Raima Adeel
Publication year - 2018
Publication title -
international finance and banking
Language(s) - English
Resource type - Journals
ISSN - 2374-2089
DOI - 10.5296/ifb.v5i2.14091
Subject(s) - granger causality , causality (physics) , economics , causation , augmented dickey–fuller test , time series , order (exchange) , test (biology) , macroeconomics , econometrics , finance , mathematics , statistics , political science , paleontology , physics , quantum mechanics , law , biology
This study aims in understanding the causal relationship between financial development and economic growth. This research used annual data and applied dickey fuller test and granger causality test in order to understand stationary level and causation in variables. The results of this test give support to first hypothesis that financial development causes economic growth. While no evidence was found on the support of our second hypothesis i.e. economic growth is causing financial development.