Financial Development,International Trade,and Economic Growth in Australia: New Evidence From Multivariate Framework Analysis |
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Authors: | Mohammad Mafizur Rahman Muhammad Shahbaz Abdul Farooq |
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Institution: | 1. University of Southern Queensland, Toowoomba, AustraliaMafiz.Rahman@usq.edu.au;3. COMSATS Institute of Information Technology, Lahore, Pakistan |
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Abstract: | This study investigates the relationship between financial development, international trade and economic growth for Australia over the period of 1965 to 2010. The autoregressive distributed lag (ARDL) bounds testing approach to cointegration is applied to examine the long-run relationship among the series, whereas stationarity properties of the variables are tested by applying two structural break tests. Results confirm the long-run relationship among the variables. Financial development, international trade, and capital appear as the drivers of economic growth in short and long runs. The feedback effect exists between international trade and economic growth. Financial development Granger causes economic growth validating supply-side hypothesis. |
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Keywords: | Financial development international trade economic growth Australia |
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