The Nexus between Economic Growth and Financial Development in the Case of Tajikistan

This thesis investigates the nexus between the economic growth and financial development as well as banking development sectors for the Tajikistan Economy. ARDL bounds testing approaches are conducted for analyzing a growth model over the period 1991Q1- 2013Q4. The empirical results suggest that financial development is a very important driving force for the economic growth in both the long and the short-terms of Tajikistan’s economy. This finding also shows that Capital does not have any impact on the output growth, whereas labor, money supply, and domestic credit provided by financial sector have a positive influence on economic growth in the case of Tajikistan’s economy. However the results reveal that there is a positive relationship between the economic growth and the financial development sector. The empirical results confirm that there is also a relationship between the economic growth and the banking development sector in Tajikistan. Keywords: Economic Growth, ARDL model, Bounds test, Tajikistan economy. Money supply, domestic credit, finance and banking sectors.