Financial Sector Development and Economic Growth in an Open Economy Framework: India's Experience

Authors

  •   Bishal Chettri Senior Financial Analyst, Standard Chartered Bank, Scope International Bank, Nungambakkam, Haddows Road, Chennai - 600 034
  •   G. Raghavender Raju Assistant Professor, Department of Economics, Sri Sathya Sai Institute of Higher Learning, Prasanthi Nilayam - 515 134, Andhra Pradesh

DOI:

https://doi.org/10.17010/aijer/2014/v3i4/55985

Keywords:

Financial Sector Development

, Economic Growth, Econometric Modelling, Vector Auto Regression (VAR) Model

C51

, C52, G20

Paper Submission Date

, July 30, 2013, Paper sent back for Revision, January 1, 2014, Paper Acceptance Date, May 12, 2014.

Abstract

The nexus between financial sector development and economic growth in India was examined using quarterly data for the period from 1996QI-2011Q4. Gross domestic product was used as an indicator of economic growth and financial sector development was measured using aggregate deposits, market capitalization, exchange rate, and foreign investments. Gross fixed capital formation was also taken into the model to identify the relative significance of physical investments. With the dynamic relationship among the variables being captured by the vector autoregression model and the impulse response function, the results from the ordinary least square estimation revealed that financial reforms have supported economic growth.

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Published

2014-08-01

How to Cite

Chettri, B., & Raghavender Raju, G. (2014). Financial Sector Development and Economic Growth in an Open Economy Framework: India’s Experience. Arthshastra Indian Journal of Economics & Research, 3(4), 32–40. https://doi.org/10.17010/aijer/2014/v3i4/55985

Issue

Volume 3, Issue 4, July-August 2014

Section

Articles
Crossref
Scopus
Google Scholar
Europe PMC

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