FINANCIAL DEVELOPMENT, FINANCIAL CRISES AND ECONOMIC GROWTH

In this paper, we study the literature of financial development and economic growth. The financial systems in respect to their operations and their effects on real sector are considered.The result of an empirical study about the financial crises and their effects on the economic growth and determinants of real sector adjustment after the financial crises are analyzed.The study shows that the financial crises have a short-run negative affect on the real sector of economy. Also the export orientation policies, external and internal environments, and financial depth have permanent and significant effects on the real sector adjustment after crises. It is depicted that the other variables have a temporary effects on the real sector adjustment after crises.