Short-Run and Long-Run Causality Between the Structure of Financial System and Economic Development

This study analyses the implications of the structure of financial system on country’s economic development. The aim of the paper is to analyse short-run and long-run causality between the structure of financial system and economic development. The following research methods were used: systemic, logical and comparative analysis of scientific literature; analysis of statistical data; time series model (Autoregressive Distributed Lag (ARDL) Model). The empirical results indicate positive short and long term very weak effect of financial system’s shift from bank-based to market-based on GDP per capita