Influential Article Review - Evaluating the Relationship Between Employment, Financial Activities and Economic Growth

Abstract

This paper examines economics. We present insights from a highly influential paper. Here are the highlights from this paper: Sound and efficient functioning of financial systems is critical to the economic prosperity of any economy. This paper investigates the tripartite relationship between financial sector output, employment, and economic growth in North Cyprus. Using relevant time series data analysis (within the framework of structural breaks and VECM), we found that financial sector output in North Cyprus is sensitive to both internal and external shocks in that its economy is well linked with the global economy, despite the political isolation sustained since the bifurcation of Cyprus into North and South. The study further documents evidence of the neutrality hypothesis in the finance-growth nexus. The underlying variables were weakly connected in the short run. However, economic growth responded to the short-run shocks and handled the equilibrating process of reverting to the long-run trend and thus, the demand following hypothesis is confirmed in the long-run. For our overseas readers, we then present the insights from this paper in Spanish, French, Portuguese, and German.