Financial Sector Development, Financialization and Economic Development in the USA.pdf

1、This study re-examined the causal relationship between financial development and economic growth in the USA during the period 1961–2012 by considering financialization within an ARDL-Bounds testing approach.We employed t

2、wo indicators of financial development and one financialization index after using principal component analysis (PCA).We applied Granger causality tests using the ARDL-ECM methodology and Toda-Yamamoto approach.The result

3、s are sensitive to financial sector indicators and Granger causality method.However,robust results strongly support:
　　1)In the long-run points of view,“Demand-Following”relationship between two economic growth source

4、s (EFF，GK) and FD along with Lucas‘s view between GY and FD;
　　2)In the short-run points of view，there are significant positive causality from EFF to FD,from FIN to FD (if GY is used in the model) and finally from EFF

5、 to FIN;
　　3)Strong relationship between EFF and FD irrespective to including FIN in the models is found;
　　4)Adding FIN term in the models decreased the power of a negative relationship between FD and GY.Finally，t

6、he study suggests for the future researches，reconsidering of mainstream view to financial sector from ―functional perspective to―functional perspective with keeping originality for the real sector through defining and me

7、asuring more dimensions of financial sector activities account for the change of service relationship between thefinancial sector and real sector as well as strengthening of the financial sector development indicator by