Empirical analysis of financial intermediation and economic growth: The case of Macedonian economy

Lazarov, Darko and Nikolov, Misho and Simenovski, Kiril (2023) Empirical analysis of financial intermediation and economic growth: The case of Macedonian economy. Journal of Economics, 8 (2). pp. 39-48. ISSN 1857-9973

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Abstract

The main goal of the paper is to examine the relationship between the financial sector and economic growth in the Republic of North Macedonia. The Macedonian economy has been facing slow development dynamics and low rates of economic growth for a long period of time. The reasons are certainly multidimensional and identifying them is quite complex. Hence, our task in the paper is to examine the impact of the financial sector on economic growth as one of the factors. First we provide a theoretical model for the analysis of the relationship between the financial sector and economic growth, while in the second part of the paper we use a methodology based on the single-country regression analysis to investigate the relationship between the financial sector measured through the lending activity of banks to private sector and economic growth measured as real GDP growth. Furthermore, we present a comparative analysis of the trend in the level of banking intermediation. The results of the analysis indicate that financial intermediation is a significant factor for the growth of the Macedonian economy through gross investments, which depicts that improving financial intermediation and reducing the interest rate will increase investments and encourage the growth of the Macedonian economy.

Item Type:	Article
Subjects:	Social Sciences > Economics and business
Divisions:	Faculty of Economics
Depositing User:	Darko Lazarov
Date Deposited:	19 Dec 2023 12:56
Last Modified:	19 Dec 2023 12:56
URI:	https://eprints.ugd.edu.mk/id/eprint/33015

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