LONG-TERM FINANCIAL DEVELOPMENT MODEL ACCORDING TO ECONOMIC GROWTH IN IRAN

Abstract

This study has done to evaluating Long-term financial development on economic growth in Iran according to a model. The population of this study is Islamic republic of Iran economic information during 1981-2011. In order to investigate the research hypotheses were used the path analysis model and Structural model. We review and test hypotheses through the path analysis model. After explaining the model and data collection, model estimation begins with a set of known relationships between measured variables. The path models as a logical extension of multiple is regression models. The ARDL and bounds testing approach to integration was adopted to estimate the long run relationship and long run dynamic parameters of the model. The test suggests that there exists an integrating relationship variables. Findings show that, financial sector should initiate new policy to boost the process of capitalization to raise economic growth by distributing financial resources to competent and profit oriented projects.