Impacto del desarrollo del sistema financiero en el crecimiento económico colombiano durante el periodo 1990-2019

Abstract

The relationship between financial development and economic growth has been widely studied from different perspectives. This paper assumes a supply-leading approach – in which financial development precedes real growth – to analyze this relationship in the Colombian case. Firstly, a review on the theory and existing empirical research is made, followed by an overview of the main characteristics of Colombia’s financial system’s evolution during 1990-2019. Then, this work empirically analyses this relationship using three main variables: annual growth of per capita income, gross fixed capital formation as a percentage of GDP (which represents investment), and an indicator of financial depth. A cointegration and vector error-correction (VECM) methodology is used, and Granger causality tests are applied. The empirical results show that the direction of this causality goes from financial depth to investment and per capita income growth. This suggests that financial development effectively influenced Colombia’s economic growth during 1990-2019.