Financial development-economic growth nexus in Pakistan: new evidence from the Markov switching model
Author | Rahman, Abdul |
Author | Khan, Muhammad Arshad |
Author | Charfeddine, Lanouar |
Available date | 2022-12-27T08:14:14Z |
Publication Date | 2020 |
Publication Name | Cogent Economics and Finance |
Resource | Scopus |
Abstract | This paper investigates the impact of financial development on economic growth in Pakistan using the Markov Switching Model over the period 1980-2017. The results based on two-state Markov switching model confirm the Schumpeter's view that finance spurs growth. The result reveals that financial development augments economic growth in both high and low economic growth regimes in Pakistan. However, the impact of financial development on economic growth is found to be relatively higher in the high-growth regime. This implies that economic growth responds differently to financial development in low-growth and high-growth regimes. Among the control variables, trade openness and government expenditures impact economic growth positively, while labour force exerts a negative impact on economic growth. 2020, 2020 The Author(s). This open access article is distributed under a Creative Commons Attribution (CC-BY) 4.0 license. |
Language | en |
Publisher | Cogent OA |
Subject | C24 F43 Financial development high- and low-growth regime O43 Pakistan economic growth regime switching model |
Type | Article |
Issue Number | 1 |
Volume Number | 8 |
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Finance & Economics [394 items ]