Do financial systems spur economic growth in the USA? An empirical investigation
In this paper, we use the autoregressive distributed lag (ARDL) bounds testing approach to examine the dynamic impact of both bank-based financial development and market-based financial development on economic growth in the United States of America (USA) during the period 1980 to 2012. In o...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Economists' Association of Vojvodina
2019-01-01
|
| Series: | Panoeconomicus |
| Subjects: | |
| Online Access: | http://www.doiserbia.nb.rs/img/doi/1452-595X/2019/1452-595X1700012N.pdf |
| Summary: | In this paper, we use the autoregressive distributed lag (ARDL) bounds
testing approach to examine the dynamic impact of both bank-based financial
development and market-based financial development on economic growth in the
United States of America (USA) during the period 1980 to 2012. In order to
adequately capture the depth and width of the USA’s financial system, we used
both bank-based and marketbased financial development indices as proxies for
bank-based and market-based financial systems. These indices were constructed
from a number of bank- and market-based financial development indicators,
using the method of means-removed average. Our empirical results reveal that
both bank-based and market-based financial development have a positive impact
on economic growth in the USA. These results apply irrespective of whether
the regression analysis is conducted in the long run or in the short run. We,
therefore, recommend that both pro-bank-based and pro-market-based financial
sector development policies should be pursued in the USA - in order to
bolster real sector growth and economic development. |
|---|---|
| ISSN: | 1452-595X 2217-2386 |