ABSTRACT Financial development is a multidimensional process. Over the years with the invention of various new products and services, the financial sector (both financial institutions and financial markets) across the globe has significantly evolved. The endeavor in this article is to investigate the relationship between financial development and economic growth in India for the period 1980–2017. To do so, it employs principal component analysis (PCA) to construct a financial development index, which measures the financial depth of the Indian economy. Using the autoregressive distributed lag (ARDL) and error correction model (ECM), the study estimates a positive effect of financial development on economic growth in the long run and the short run, respectively. In addition, the empirical estimates posit a bidirectional relationship between financial development and economic growth. The uniqueness of this study lies in that it unravels a unidirectional relationship between the stock market and economic growth. The study, however, finds that appropriate liberalization policies spur economic growth in India.

中文翻译：

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重新审视金融发展对印度经济增长的影响：金融发展的衡量标准很重要吗？

摘要金融发展是一个多维过程。多年来，随着各种新产品和服务的发明，全球范围内的金融部门（包括金融机构和金融市场）都取得了长足的发展。本文的工作是调查1980-2017年印度金融发展与经济增长之间的关系。为此，它采用主成分分析（PCA）来构建金融发展指数，以衡量印度经济的金融深度。这项研究使用自回归分布滞后（ARDL）和误差校正模型（ECM），分别估计了金融发展对长期和短期经济增长的积极影响。此外，实证估计在金融发展与经济增长之间存在双向关系。这项研究的独特之处在于它揭示了股票市场与经济增长之间的单向关系。但是，该研究发现，适当的自由化政策可以刺激印度的经济增长。