Generolo Jono Žemaičio Lietuvos karo akademija

The discussion about the impact of financial development on economic growth is still relevant for economists. However, in recent years, after the financial crises of the first decade of the 21st century, there has arisen certain scepticism about the positive impact of the growing financial sector on economic growth rates. Moreover, specific cases of negative consequences of such a connection or its absence have become known. The 2008-2010 crises, certainly, played an important role in rethinking the nature of the impact of the financial sector on the real sector in the economy, which led to new arguments in favour of a relatively more cautious approach to stimulating the financial sector, given the potential negative effects on the country’s socio-economic security. The aim of the research is to determine the nature of the relationship between financial development and economic growth and its direction in Latvia in the period 1995–2017.

The aim of the research is to assess convergence processes of market financial depth indicators in states with low, lower middle, upper middle, and high incomes in the period 1993-2015. The relevance of the research is determined by the fact that the deepening of financial markets encourages the increase in the level of economic stability and security, making it possible to serve the growing streams of trans-border capital. Deeper markets are able to provide alternative sources of finance during crises of international liquidity limiting sharp fluctuations of asset prices and currency exchange rates. Globalization of the world economy determines qualitative changes in the development of the world financial market. This is reflected in the dissolving boundaries between its various segments, as a result of which, problems of certain states and segments of the economy significantly influence other states and segments.