Original scientific paper
https://doi.org/10.1080/1331677X.2019.1663436
The inter-linkages between financial and economic development in the European Union Countries
Romualdas Ginevičius
; Vilnius Gediminas Technical University, Vilnius, LT, Lithuania
Gitana Dudzevičiūtė
; General Jonas Zemaitis Military Academy of Lithuania, Vilnius, LT, Lithuania
Martin Schieg
; Technical University of Munich, Munich, Germany
Kęstutis Peleckis
; Vilnius Gediminas Technical University, Vilnius, LT, Lithuania
Abstract
The paper has investigated the relationships between financial and economic development in the European Union countries using annual data over the period of 1998–2016. The authors have done this by looking at descriptive statistics and also by applying econometric methods. This study has combined different approaches prevailing in the scientific literature and contributed to understanding the importance of the interrelationship between the variables. The investigation has led to the conclusions as follows: (1) the countries with the middle GDP per capita indicators have demonstrated the highest level of financial development; (2) unidirectional causality running from real GDP to financial development has been detected in Denmark, Portugal and Latvia; (3) unidirectional causality running from financial development to real GDP has been found in Austria; (4) two-way causal relation- ships between financial and economic development have been detected in Luxembourg, France and United Kingdom; (5) the results of Finland, Germany, Czech Republic, Slovakia, Croatia and Bulgaria have supported the neutrality approach. The research provides general insights and a better understanding to formulate the directions for sustainable economic development in the countries under consideration.
Keywords
Financial development; economic development; Granger causality
Hrčak ID:
229661
URI
Publication date:
22.1.2019.
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