The Effect Stock Market Development on Economic Growth in Iran

This article is trying to test the relation between economic growth and development of the stock market for period 1368-1388. OLS model and Granger Causality used to conclude this relation. VAR model Impulse Response function and variance Decomposition for analysis of variables are used too. Test results show that there is a one way relationship from economic growth to the stock variables. Direction of causality between financial development and economic growth is an empirical question that can be different for different countries. The variable are GDP as the economic growth and shares traded VE,current market value VP and financial indicators IF as the stock market variables.