Financial Development and Economic Growth in CEE Countries
Financial Development and Economic Growth in CEE Countries

Author(s): Gergana Mihaylova-Borisova
Subject(s): Politics / Political Sciences, Politics, Economy, Business Economy / Management, Civil Society, Economic policy, Developing nations, Socio-Economic Research
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: financial development; CEE countries; economic growth
Summary/Abstract: Given the important financial sector’s role in economies, the study examines whether there is a relationship between the GDP growth and financial development of CEE countries. For this purpose, first the causality is tested by means of Granger-causality test and then an attempt is made to assess the influence of one variable on the other. The GDP growth and financial development’s relationship is examined for the ten countries in CEE, with the period covered being 2010-2022. It is expected that financial development has a great importance for the improved growth in the studied countries. Data on loans, deposits in the banking system, and market capitalization as a share of GDP are used. The results confirmed that financial sector contributes positively to the realization of higher and stable GDP growth in CEE countries.

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