The Relationships between Financial Development and Economic Growth: Evidence from Taiwan

• Main Authors: Can Fu Zhuang, 莊能富
• Other Authors: Shun-Jen, Hsueh
• Format: Others
• Language: zh-TW
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/b3s32d

碩士 === 正修科技大學 === 財務金融研究所 === 102 === Advanced countries have an experience that the financial developments seem to have strong influences on economic growth, and therefore they gave up the regulation policies and adopted some revolution ones. What are the relationships between financial development and economic growth? It is worthy to investigate that. The paper uses quarterly time series data of Taiwan, covering from 1988 to 2012, to investigate the relationships among economic growth, financial development, the ratio of exports and the saving rate. We employ Johansen’s maximum likelihood estimate (MLE) to examine the co-integration relationships among variables and find the co-integration relationships really exist among them, namely, the equilibrium relationships among variables being supported. Based on vector error correction model (VECM), the paper examines the Granger causality among above four variables and finds that there exist the two-way feedback relationships between financial development and economic growth, that is, the changes of economic growth will cause the changes of financial development and vice versa.