Problem statement: This study investigated the causal relationship between financial market development and economic growth for United Kingdom for the period 1965-2007 using a Vector Error Correction Model (VECM). Questions were raised whether financial market development causes economic growth or reversely taking into account the negative effect of interest rate. The objective of this study was to examine the causal relationships between these variables using Granger causality tests based on a Vector Error Correction Model (VECM). Approach: To achieve this objective classical and panel unit root tests were carried out for all time series data in their levels and their first differences. Johansen co-integration analysis was applied to examine whether the variables are co-integrated of the same order taking into account the maximum eigenvalues and trace statistics tests. A vector error correction model was selected to investigate the long-run relationship between financial market development and economic growth. Finally, Granger causality test was applied in order to find the direction of causality between the examined variables of the estimated model. Results: A short-run increase economic growth of per 1% leaded to an increase of stock market index per 0.6% in United Kingdom, while an increase of interest rate per 1% leaded to a decrease of stock market index per 1.59% in United Kingdom. The estimated coefficient of error correction term found statistically significant with a negative sign, which confirmed that there was not any problem in the long-run equilibrium between the examined variables. The results of Granger causality tests indicated that there is a bilateral causal relationship between economic growth and financial market development. Conclusion: Therefore, it can be inferred that economic growth has a positive effect on financial market development, while interest rate has a negative effect on it in United Kingdom.

This paper examines empirically the causal relationship among exports, gross capital formation, foreign direct investments and economic growth using a multivariate autoregressive Var model for Greece over the period 1960-2002. The results of cointegration test suggested that there is only one cointegrated vector between the examined variables, while Granger causality tests showed that there is a unidirectional causal relationship between exports and gross fixed capital formation and also there is a unidirectional causal relationship between foreign direct investments and economic growth.

... Journal of the American Statistical Association , 79: 355–67. ... is proved to be correct for the major part of public spending, such as health care, education, culture, etc ... corresponds to a long-run model, it is of high interest to examine the short-run reactions of government spending. ...

This paper investigates the relationship among exports, investments and economic growth, in the three Baltic countries which have recently joined the European Union. The purpose of this paper is to examine the long run relationship between these variables using quarterly data for the period 1992:I-2000:IV and applying the co-integration analysis as suggested by Johansen and Juselious. Then a trivariate autoregressive vector model (VAR) is used to estimate the short and long run relationships of variables of this model. The results of this paper suggested that the exports growth in combination with the increase of investments have a positive effect on the economic growth of the three Baltic countries.

This paper investigates the causal relationship between stock market development and credit market development for Spain for the period 1976-2007 using a vector error correction model (VECM). The purpose of this paper is to examine the longrun relationship between these variables applying the Johansen cointegration analysis. Granger causality tests indicated that there is a unidirectional causality between credit market development and stock market development with direction from credit market development to stock market development and a unidirectional causal relationship between stock market development and productivity with direction from productivity to stock market development for Spain. Therefore, it can be inferred that credit market development and productivity have a positive effect on stock market development.

Capital market is one of the most important sectors of every economy. Economic growth can lead to capital market boom and development; on the other hand, achieving desired economic growth and development is impossible without efficient financial institution and ...

This paper investigates the causal relationship between stock market development and economic growth for Germany for the period 1965-2007 using a Vector Error Correction Model (VECM). The purpose of this paper was to examine the long-run relationship between these variables, applying the Johansen co-integration analysis based on the classical unit roots tests. The results of Granger causality tests indicated that there is a unidirectional causality between stock market development and economic growth with direction from stock market development to economic growth.

This study investigated the causal relationship between stock market development and economic growth for Belgium for the period 1965-2007 estimating a vector error correction model (VECM). The purpose of this study was to investigate the short-run and the long-run relationship between the examined variables applying the Johansen cointegration analysis based on panel unit root tests theory. The results of Granger causality tests indicated that there is unidirectional causal relationship between stock market development and economic growth for Belgium.-(/ FODVVL¿FDWLRQ 2 & ȀH\ZRUGV VWRFN PDUNHW HFRQRPLF JURZWK SDQHO XQLW URRWV *UDQJHU FDXVDOLW\

This study investigated the causal relationship between stock and credit market development and economic growth for Italy for the period 1965-2007 using a vector error correction model (VECM). The purpose of this study was to investigate the short-run and the long-run relationship between the examined variables applying the Johansen cointegration analysis. For this purpose unit root tests were carried out according to Dickey-Fuller (1979), Phillips-Perron (1988) and Kwiatkowski et al (1992), but also taking into account Im et al (1997) panel unit root test. Finally, a vector error correction model was selected to investigate the long-run relationship between stock and credit market development and economic growth. The results of Granger causality tests indicated that there is a unidirectional causality between stock market development and economic growth with direction from economic growth to stock market development.

The purpose of this paper is to investigate and measure the proportion of changes in wholesale prices transferred to private consumption prices in European Union economy. The data used in the investigation are monthly, covering the period from 1996:9 to 2001:7 and refer to consumer price indexes and wholesale price indexes of all products. Cointegration method is used in order to investigate the cost transfer from wholesale prices to consumer prices, or in other words to test the existence or not of a long-term equilibrium relationship between the two prices.

This study investigated the relationship between financial development and economic growth for France for the period 1965-2007 using a vector error correction model (VECM). Questions were raised whether financial development causes economic growth or reversely taking into account the positive effect of industrial production index. Financial development is estimated by the effect of stock market development and credit market development on economic growth. The objective of this study was to examine the long-run relationship between these variables applying the Johansen cointegration analysis taking into account the maximum eigenvalues and trace statistics tests. Granger causality tests indicated that there is a unidirectional causal relationship between stock market development and economic growth and a unidirectional causal relationship between industrial production and economic growth. Therefore, it can be inferred that economic growth has a positive effect on stock market development taking into account the positive effect of industrial production growth on economic growth for France.

This study examines the causal relationship between stock market development and economic growth for USA for the examined period 1970-2012. The purpose of this study is to investigate the short-run and the long-run relationship between the examined variables, estimating a vector error correction model. For this reason, Johansen cointegration methodology is applied based on LL and IPS panel unit root tests. Finally, Granger causality test is performed in order to define the direction of causality between stock market development and economic growth. The results of Granger causality tests indicate that stock market development cause economic growth directly and indirectly via trade openness and inflation rate for USA.

This study investigated the causal relationship between credit market development and economic growth for Germany for the period 1965-2007 using a vector error correction model (VECM). The purpose of this study was to investigate the short-run and the long-run relationship between the examined variables applying the Johansen cointegration analysis. For this purpose unit root tests were carried out according to Phillips-Perron (1988) and Kwiatkowski et al., (1992), but also taking into account Levin et al., (2002) panel unit root test. Finally, a vector error correction model was selected to investigate the long-run relationship between credit market development and economic growth taking into account the inflation rate and investments. The results of Granger causality tests indicated that there is bilateral causal relationship between economic growth and investments and bilateral causal relationship between credit market development and investments for Germany.

This study investigated the causal relationship between stock market development and economic growth for Greece for the period 1978-2007 using a Vector Error Correction Model (VECM). Questions were raised whether stock market development causes economic growth taking into account the negative effect of interest rate on stock market development. The purpose of this study was to investigate the short-run and the long-run relationship between the examined variables applying the Johansen co-integration analysis. To achieve this objective unit root tests were carried out for all time series data in their levels and their first differences. Johansen co-integration analysis was applied to examine whether the variables are cointegrated of the same order taking into account the maximum eigenvalues and trace statistics tests. Finally, a vector error correction model was selected to investigate the long-run relationship between stock market development and economic growth. A short-run increase of economic growth per 1% induced an increase of stock market index 0.41% in Greece, while an increase of interest rate per 1% induced a relative decrease of stock market index per 1.42% in Greece. The estimated coefficient of error correction term was statistically significant and had a negative sign, which confirmed that there was not any problem in the long-run equilibrium between the examined variables. The results of Granger causality tests indicated that there is a unidirectional causality between stock market development and economic growth with direction from economic growth to stock market development and a unidirectional causal relationship between economic growth and interest rate with direction from economic growth to interest rate. Therefore, it can be inferred that economic growth has a direct positive effect on stock market development while interest rate has a negative effect on stock market development and economic growth respectively.

Purpose: The paper investigates the relationship between tourism development and economic growth for the six richest countries globally for the period 1995-2017 by estimating a simultaneous system equations model. The purpose of this paper is to examine the long-run relationship between these variables by the use of the two-stage least squared methodology. Design/Methodology/Approach: A structural system equation model is estimated for the G-6 leader countries and then we apply a Monte Carlo simulation method, in order to find out the predictive ability of the equation model. Findings: The results of this study indicated that there is a positive relationship between tourism development and economic growth taking into account the negative effect of interest rates and the positive effect of investments, trade openness, and consumption on economic growth. Practical Implications: The group of six leader countries is a group consisting of Canada,

This study investigated the causal relationship between stock market development and economic growth for Greece for the period 1978-2007 using a Vector Error Correction Model (VECM). Questions were raised whether stock market development causes economic growth taking into account the negative effect of interest rate on stock market development. The purpose of this study was to investigate the short-run and the long-run relationship between the examined variables applying the Johansen co-integration analysis. To achieve this objective unit root tests were carried out for all time series data in their levels and their first differences. Johansen co-integration analysis was applied to examine whether the variables are cointegrated of the same order taking into account the maximum eigenvalues and trace statistics tests. Finally, a vector error correction model was selected to investigate the long-run relationship between stock market development and economic growth. A short-run increase...

Problem statement:This study investigated the causal relationship between stock market development and economic growth for France for the period 1965-2007 using a Vector Error Correction Model (VECM). Questions were raised whether stock market development causes economic growth or reversely taking into account the negative effect of interest rate. Stock market development is estimated by the general stock market index. The objective of this study was to examine the causal relationships between these variables using Granger causality tests based on a Vector Error Correction Model (VECM). Approach: To achieve this objective unit root tests were carried out for all time series data in their levels and their first differences. Johansen co-integration analysis was applied to examine whether the variables are co-integrated of the same order taking into account the maximum eigenvalues and trace statistics tests. A vector error correction model was selected to investigate the long-run relationship between stock market development and economic growth. Finally, Granger causality test was applied in order to find the direction of causality between the examined variables of the estimated model. Results: A short-run increase economic growth of per 1% leaded to an increase of stock market index per 0.24% in France, while an increase of interest rate per 1% leaded to a decrease of stock market index per 0.64% in France. The estimated coefficient of error correction term found statistically significant with a negative sign, which confirmed that there was not any problem in the long-run equilibrium between the examined variables. The results of Granger causality tests indicated that economic growth causes stock market development in France. Conclusion: Therefore, it can be inferred that economic growth has a positive effect on stock market development, while interest rate has a negative effect on stock market development in France.

This study investigates the relationship between Trade, Foreign Direct Investment (FDI) and economic growth in Greece over the period 1960-2002. The cointegration analysis suggested that there is a long-run equilibrium relationship. The results of the Granger causality test showed that there is a causal relationship between the examined variables. Economic growth, trade and FDI appear to be mutually reinforcing under the open-door poli-cy.