Document Type : Research Paper

Author

Abstract

Economic growth is the most important symbol of government, so economists are trying to better and more accurate to understand dynamics and factors influencing changes in this indicator. Policymakers can help to improve it. In this study, the relationship between economic growth, development of the banking sector and some macroeconomic variables was investigated using Panel-VAR method. For this purpose panel data of D8 countries during period of 2008-2013 has been used. For development of banking sector indicators of money supply, rate of credit to private sector and credit to banking sector and macroeconomic variables are involved, foreign direct investment, trade openness, inflation and government spending.
The results of this paper indicate that amount of credit to the banking sector and credit to the private sector had negative effect on economic growth. The broad moneysupply, foreign direct investment and trade openness has a positive effect on economic growth and the effect of foreign direct investment is more than other variables in D8 countries in our period.

Keywords

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