Financial Development and Economic Growth: Evidence from Albania - Economicus

By, Sara CAUSHAJ, MSc. Tatjana MOÇKA

Abstract
Purpose: This research paper explores the complex relationship between financial development and economic growth in Albania. Over the past few decades, Albania has undergone significant economic transformations, marked by transitions from a centrally planned economy to a market-oriented one. The role of the financial sector in fostering economic growth has become increasingly crucial in this context. Methodology: To assess the impact of financial development on economic growth, this study employs various quantitative methods, including econometric models and statistical analysis. The research utilizes time-series data (2002-2020) to examine the long-term relationship between financial indicators (such as credit availability, liquidity, and financial market depth) and key economic variables (such as GDP growth). Findings: Preliminary findings suggest a positive correlation between financial development and economic growth in Albania. Value: Also, the paper contributes to the existing literature on the relationship between financial development and economic growth, with a focus on the unique case of Albania. The findings have implications for policymakers and stakeholders seeking to strengthen the financial sector as a catalyst for sustained economic development.
Key words: financial development, economic growth, causality, liquidity, assets.

https://doi.org/10.58944/obtq3518