Journal of Science and Innovative Development ISSN 2181-4317

THE IMPACT OF THE FINANCIAL SECTOR TO THE ECONOMIC GROWTH: ON THE EXAMPLE OF CIS COUNTRIES

Khadjieva Indira Shokirboyevna, Khamrakhudjaev Nematkhon Yakhyokhanovich August 20, 2018

Abstract

<p>As it known, the economic growth is a&nbsp;predominantly complex process, since it &nbsp;depends on&nbsp;various components of the nations&rsquo; economy such&nbsp;as labour, human and physical capital accumulation,&nbsp;income distribution within a nation, legal and&nbsp;political stability, &nbsp;foreign trade, &nbsp;etc.. More precisely,&nbsp;theoretical and empirical literature is always&nbsp;challenging the question that one of the core stone&nbsp;mechanisms of economic growth is the development&nbsp;of &quot;nancial sector. Mainly the expansion of &quot;nancial&nbsp;sector is measured by its depth, scope, stability&nbsp;and e#ciency of &quot;nancial systems that comprises&nbsp;<br /> e!ectively operating markets, &quot;nancial institutions&nbsp;and regulations, and intermediaries. $erefore,&nbsp;the economic growth itself means the increase in&nbsp;the economic capacity of production of nation&rsquo;s&nbsp;goods and services from one period to another.&nbsp;Moreover, it has been emphasized in many provoking&nbsp;<br /> international papers that high deepening in &quot;nancial&nbsp;area positively e!ects &nbsp;the growth in &nbsp;the economy. In&nbsp;this regard, the proposed work will examine whether&nbsp;this conception &nbsp;is true for the case of selected CIS&nbsp;countries while studying the research question:&nbsp;&lsquo;Does &quot;nancial sector enhancement promote the&nbsp;level of productivity output level: on the example&nbsp;of CIS (Commonwealth of Independent States)&nbsp;countries. In order to postulate the case in CIS&nbsp;<br /> countries the hypothesis of the e!ect of &quot;nancial&nbsp;development on output level in the economy will&nbsp;put forward. Moreover, while using proposed model&nbsp;it will be examined whether &quot;nancial growth has&nbsp;an encouraging in%uence on growth or vice versa.&nbsp;$us, the &nbsp;aim of the research is a crucial concern as&nbsp;it presents a particular guidance whether deepening&nbsp;the &quot;nancial sector is an essential and su#cient&nbsp;circumstance to achieve higher and preferred growth&nbsp;rates in selected countries. Moreover, it helps to&nbsp;gauge the extent to which &quot;nancial sector should&nbsp;be improved to gain higher economic growth in&nbsp;<br /> emerging countries.&nbsp;</p>