This study examines the relationship between financial development and economic growth in the North American region. For this purpose, it uses the generalized dynamic factor model proposed by Forni et al. (2005) and annual data from the United States, Canada, and Mexico for the period 1980-2017. The findings suggest that: i) there are common factors among the financial markets and economies of the region despite their asymmetries in size; ii) economic growth rates are sensitive to common components; iii) the causal relationship between financial development and economic growth depends on the financial indicators considered. The findings can be useful to analyze the integration process in North America and to propose regional policies.

No abstract

This article uses quarterly data from 1971 to 2007 to investigate the finance-growth nexus in Taiwan. We take into account the role of stock market into our examined model and revise the stock-flow problem when calculating financial related variables. The result supports the comovement phenomenon among financial intermediation, stock market and economic development based on the Johansen cointegration. The contribution of stock market capitalization to economic growth is substantially larger than that of banking in the long-term, highlighting the importance of stock market in Taiwan. Further, Granger causality based on Vector Error Correction Model (VECM) concludes the bi-directional causal relation between financial development and economic growth, suggesting the simultaneous interaction of supply-leading and demand-following phenomena addressed by Partick (1966).

No abstract

No abstract