Financial Development and Economic Growth of India

• Main Authors: Kuo-Chu Tsai, 蔡國柱
• Other Authors: Shu-Hwa Chang
• Format: Others
• Language: zh-TW
• Published: 2006
• Online Access: http://ndltd.ncl.edu.tw/handle/65156056676603637476

碩士 === 真理大學 === 財經研究所 === 94 === In the past few years, the global economy was decayed, but India still had a proud economic growth rate. At the same time, Goldman Sachs delivered the focal “BRIC Report” in October, 2003, and arranged Brazil, Russia, India, and China (BRIC) to be the four countries which have the most powerful capabilities on the economic development, and let the economic development of India to become the international cynosure. The study uses time series data of India, and wants to find out what the role does the domestic financial development of India play on the economic development, and treats further to the causality relation of the financial development and economic growth of India, and adds the inflation to peruse the causality relation of the financial development, economic growth, and inflation of India. About the empirical methodology, the study uses the Johansen’s (1992, 1995) maximum likelihood estimate (MLE) to test the correlation between the parameters if the correlation exists or not. If the correlation between the parameters exists, then uses the vector error correction model (VECM) to be the basis, and treats further to the causality relation of the economic development, stock market development, and bank development of India. The empirical results find out if without considering the price, the financial development and economic growth of India will effect and promote to each other. If considering the price, the financial development and economic growth of India will effect and promote to each other with the corresponding level. But the price will appear the very different results to the economic development under the different variables of the bank index.