The dynamics of insurance sector development, banking sector development and economic growth: Evidence from G-20 countries

This paper examines the mutual relationship between banking sector development, insurance sector development, and economic growth in the G-20 countries between 1980 and 2012. Our results demonstrate that there is a long-run equilibrium relationship between these three variables. We then use a panel vector auto-regression model to reveal the nature of Granger causality among these three variables. As expected, we find that both banking sector development and economic growth Granger cause insurance sector development.