Asymmetric causality between economic uncertainty and financial development: empirical evidence

Murdipi, Rafiqa (2025) Asymmetric causality between economic uncertainty and financial development: empirical evidence. International Journal of Research and Innovation in Social Science, 9 (15). pp. 1308-1314. ISSN 2454-6186

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Abstract

This study analyses the asymmetric causal relationship between economic uncertainty and financial development across 86 countries. The employing of asymmetric Granger causality, as proposed by Hatemi-J (2012), indicates the presence of an asymmetric causal relationship between economic uncertainty and financial development. Positive change, namely a rise in economic uncertainty, adversely affects the growth of financial institutions. The advancement of financial institutions mitigates economic instability. Simultaneously, an escalation in economic uncertainty leads to heightened fluctuations in the financial market. Heightened fluctuations in the financial market will aggravate economic instability. This research will benefit policymakers, financial institutions, and investors by examining the dynamic link between economic uncertainty and financial development for risk reduction and forecasting.

Item Type:	Article (Journal)
Additional Information:	9686/124249
Uncontrolled Keywords:	Economic uncertainty, financial development, asymmetric granger causality
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HG Finance
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Kulliyyah of Economics and Management Sciences > Department of Finance Kulliyyah of Economics and Management Sciences
Depositing User:	Dr. - Murdipi
Date Deposited:	11 Nov 2025 15:58
Last Modified:	11 Nov 2025 16:11
URI:	http://irep.iium.edu.my/id/eprint/124249

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