The impact of financial development on economic indicators: a dynamic panel data analysis

The study investigates the effect of financial development on major economic indicators, i.e., growth, inflation, and employment by applying System GMM estimation technique for a panel 120 countries period 1997 to 2017. Four distinct proxies are used, private sector credit, liquid liabilities, money quasi money, bank credit. results contradict traditional supply-lending hypothesis reveal negative impact growth. Moreover, is found be positively associated with inflation It suggested that there need reform strengthen supervision intermediaries ensure sound prudential lending practices. Furthermore, more credit needs allocated highly productive firms.