CAUSALITY AND COINTEGRATION RELATIONSHIPS BETWEEN FINANCIAL DEVELOPMENT AND HUMAN DEVELOPMENT

The studies about the relationship between financial development and economic growth that express the economic dimension of human development are frequently encountered in literature. This study aims to provide empirical evidence that the relation between financial development and Human Development Index which a unified index for income, education and health. In this study, also the gap about this subject in the literature was tried to be filled. For this, financial development index, which is formed by four different financial development indicators, is used as a measure of financial development and the relation of this index with United Nations Human Development Index is examined. The data cover the period of 1990-2015. In the study, principal component analysis, ARDL bounds test approach and Toda-Yamamoto Granger Causality Analysis were used. As a result of ARDL analysis, while cointegration, short and long term relationships were not detected, Toda-Yamamoto analysis revealed a causality relationship from financial development to human development in accordance with the findings of the studies in the literature