Abstract
This paper aims to contribute to the economic debate on the relationship between financial development and economic growth from a regional development perspective. This research empirically examines the relationship between economic growth and financial development based on the Federative Units of Brazil, from 2006 to 2017. From a methodological point of view, we use econometric models for panel data that make it possible to show the effects of financial development indicators on real GDP. Regarding the assessment by States, the empirical results show a positive relationship between the developmentof the financial system and economic growth. More specifically, the results show that economic and financial indicators such as “economic openness”, “term deposits” and “demand deposits”, as well as fiscal indicators such as current expenditures, positively affect real GDP.Finally, the empirical results by region are similar to the results by federation units.
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