Abstract:

The aim of this study is to address the impact of financial development on human development in the top 10 rising market economies for the period 1990-2018 using the panel vector autoregression (PVAR) approach. For this purpose, the loans provided to the private sector and the M2 money supply have been adopted as the main indicators of financial development. The results found that a unit increase in the share of the loans provided to the private sector in GDP increased human development by about 0.2 per cent, while an increase in the supply of M2 money did not have a statistically meaningful impact. Furthermore, the causality test results revealed the existence of a dual causality relationship between human development and financial development, while the causality relationship between M2 money supply and human development was not found.