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Financial development and economic growth in Ecuador: 2000-2017

Abstract:

This article examines the relationship between financial development and economic growth in Ecuador for the period 2000-2017. Under the estimation of an error correction vector model (VEC), there is evidence of cointegration between financial deepening and real GDP, being possible to infer a positive, significant, and long-run relationship between these variables. It has also been established that a positive shock in financial development and investment causes an increase in economic growth.