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Financial Development and Economic Growth

In: Business and Management

Submitted By emaserbia
Words 2803
Pages 12
Executive summery

This literature review discusses objectives of financial development and economic growth as well as existing relationship of this concept. Financial development is strongly connected with economic situation, but we do not know for sure if this always implies economic growth. There are many factors which influence relationship between financial development and economic growth and its effects such as financial liberalization, government ownership of the banks, monetary policy and rate of inflation, institutional and regulatory framework of financial markets in particular countries. Many researchers are trying to give the right questions and explanations on this field but still there are unresolved issues and implications which give open space for future investigations.

Table of Contents

1. Introduction………………………………………………………….2 2. Literature Review……………………………………………………2 2.1. Relationship between Financial Development and Economic Growth………2 2.2. Empirical methodologies……………………………………………………..5 2.3. Effects of Merger and Acquisitions in Bank Industry on relationship between financial development and economic growth…………………………………7 3. Conclusion…………………………………………………………....8 4. Reference List………………………………………………………..9

1. Introduction Financial system is a basis of current economic trends and there is no possibility of doing businesses and transactions without use of its services. Since for every single transaction in our business and private life we need money or equivalents of money, financial system is there to make it available for our needs. According to Levine (1997) the main role of financial system is contained in efficient allocation of resources, risk reduction, simplifying...

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