Volume 19, Issue 3 (2019)                   QJER 2019, 19(3): 31-59 | Back to browse issues page

‎ 20.1001.1.17356768.1398.19.3.1.9

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Khalili Araghi M, Farzinvash A, sadri H. The Impacts of Financial Development on Growth: TVP-FAVAR Model. QJER 2019; 19 (3) :31-59
URL: http://ecor.modares.ac.ir/article-18-15963-en.html
The Impacts of Financial Development on Growth: TVP-FAVAR Model
Mansour Khalili Araghi1 , Asadollah Farzinvash * 2, Hamed Sadri3
1- Professor of Economics, University of Tehran
2- Professor of Economics, University of Tehran , farzinvash@ut.ac.ir
3- Ph.D. of economics, Faculty of Economics, University of Tehran
Abstract:   (7083 Views)
Financial development is one of the most important causes of economic growth in the long run. The study of factors affecting economic growth, as a key economic target, is of great importance. In this paper, the effect of financial development on the economic growth is studied in Iran during 1989 to 2016. In order to increase the accuracy and flexibility of results, this paper uses the Time Varying Parameter Factor Augmented VAR (TVP-FAVAR) model, which makes possible to change coefficient and to contribute the individual variables at any point of time. First, the latent variable for financial development is estimated in the Iranian economy. Then, a model is specified including the variables of liquidity volume, oil revenues, economic growth and financial development. The results of the impulse- response functions show that a shock to the financial development has a positive effect on economic growth during the period under study. In addition, the shock from oil revenues only leads to an increase in economic growth over the short term and adjusts over several years, while the liquidity shocks have no significant effects on economic growth in most years.
Keywords: Financial Development, Economic Growth, Structural Dynamic models
Full-Text [PDF 1127 kb]   (2765 Downloads)    
Article Type: Original Research | Subject: Economics
Received: 2018/01/30 | Accepted: 2019/07/30 | Published: 2019/07/30
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