FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH IN EASTERN EUROPE

Abstract

This article analyzes for two countries in Eastern Europe, Romania and Bulgaria, the impact of financial development on economic growth, for the period 1993-2019. The methodology used is Markov Switching model and the results show that financial development influences at all times, low and growth, economic growth. However, there are differences between the two countries: for Bulgaria, the regimes and amplitudes are lower, while for Romania they are higher.

Keywords

• financial development;
• economic growth;
• markow switching regression;