The Dynamics of Financial Development, Government Quality, and Economic Growth in Different Groups of Economies

This study examines the causal relationship between economic growth, financial development, and national governance. To analyze three-way link of stated variables, Panel Vector Auto-Regressive (PVAR) model was applied to 115 economies 1996 2018. The impact each variable shock is explored through Impulse Response Function (IRF) variance decomposition. results indicate that development governance shocks have a more persistent on growth in low-income than emerging developed economies. In contrast, output influences long-term affects monotonic fashion all three sets Moreover, as critical factor for especially