Abstract

The aim of this study is to discuss the impact of financial development on human development in the top 10 emerging market economies for the period from 1990 to 2018 using panel vector autoregression (PVAR) approach. For this purpose, credits to private sector and M2 money supply are adopted as main financial development indicators. The results obtained showed that a one-unit increase in the share of credits to private sector in GDP increased human development by about 0.2 percent, while the effect of M2 money supply is statistically insignificant. In addition, while there is a bidirectional causality between human development and financial development, causality relationship has not been found among M2 money supply and human development.