See email Essay Example | Topics and Well Written Essays - 1750 words

See email - Essay Example In this research we will use Christopoulous and Tsionas (2004) model, where the growth rate of GDP is dependent of financial development along side with other variable. Some of the countries in the Asian economy which will be considered are South Korea, Hong Kong, Taiwan, Pakistan and China. These countries will be focused in trying to study the contribution of financial market in the process of developing the economy. They all have similar economic development progress, culture and geographic proximity, thus making it possible to be used in determining the impact of financial market to the overall economic growth in a particular economy. The results will vary depending on the nature of the economic system, pattern of financial system and the type of model used to analyze the data. A strong correlation that exists between economic growth and financial market is a well recognized fact which has received more attention by most economists. This can be supported by the revolutionary works of Walter Bagehot (1873) and Joseph Schumpeter (1912). Over time, the direction in financial markets has really evolved growth and a strong association of development with rapid capital increase. Generally, when there are no funds in a particular country, then, there is no incentive for economic development. Immediately after accumulation of funds and an increase in per capita, financial markets become very active with the emergence of the financial intermediaries that tend to grow in number and size. This economic growth has a positive change in the overall production level of goods and services in that particular economy. Most of the conventional economists suggest that, factors of production such as capital, land and labor are the key determinants of technological change and a re the main source of change in the production function. It is obvious that a well functioning financial