Abstract
In this paper, the link between financial development and economic growth in OECD member countries is investigated using unbalanced panel cointegration and causality analysis for thepe riod 1980-2011. There sults of thePe droni and Kao Cointe gration Analysis show the existence of long-run relationship between financial development and economic growth. The result of Granger Causality Analysis indicates that there is a unidirectional causality relationship running from economic growth to the three proxy variables for financial development while a bidirectional relationship between broad measure of money and economic growth is observed. Therefore, it can be said that the demand-following phenomenon is dominant.
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