Examination of the relationship between financial development level and economic growth: Azerbaijan case

In recent years, there has been an increasing interest in the relationship between economic growth and financial development in countries. Researchers are trying to understand the effects of mutual relations and to determine the direction of the relationship between these two concepts. The study consists of 3 parts and firstly the concepts of financial development and economic growth are explained. From this point of view, in the first part, the concepts of financial development and financial system are explained, then the functions of the financial system, the measurement of financial development, economic growth and economic growth theories are mentioned. In the second part of the study, the relationship between the two concepts was examined and the literature was searched and the studies conducted over the years were revealed. In this context, the finance and growth school of the 1960s, the McKinnon Show school of the 1970s, the criticism of the financial liberalization policy of the 1980s, and the finance and internal growth of the 1990s are explained. Finally, the literature on the subject was searched and the effect of financial development on the Gross Domestic Product (GDP) between 2005-2019 was tested with empirical analysis. GDP is considered as the dependent variable, the place of M3 money supply in GDP and the place of SDV loans in GDP as independent variable.