Financial development drives economic growth and shapes future prosperity worldwide.
Financial development is crucial for economic growth. Studies show that a well-developed financial system can predict future economic growth rates, capital accumulation, and technological advancements. The financial system helps reduce information and transaction costs, influencing savings, investments, and long-term growth. It's not just about specific financial tools or institutions, but about how the financial structure functions overall. The relationship between financial structure and economic growth is key for understanding how financial systems impact overall economic development.