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Abstract
Objective: The objective of this study is to investigate the links between the level of financial development and poverty in Armenia, with the aim of assessment the peculiarities of this relationship. Theoretical Framework: In this paper, the main theories and findings that related to the research are presented. The theory of Economy, results of the papers of Zuang, Honohan and others provide a strong basis for comprehension the context of the study. Method: The research is based on annual data of the RA for the period of 2004-2020. Using regression analysis based on the least squares’ method, the relationship between poverty and economic development indicators, such as financial depth, financial inclusion and economic growth was evaluated. Then, using logarithmic connections, the correlation links between the three factors of poverty change and economic development were estimated. Results and Discussion: The results of the regression model have proved that the second indicator of financial depth (the ratio of gross domestic savings to GDP (in %)) and financial inclusion are most influential in terms of poverty rate reduction, while economic development has the least impact. According to the estimates of the functional correlation between poverty and economic growth in Armenia, when the average GDP per capita increases, income also increases at the lowest decile, and poverty drops. Research Implication: The impact of financial development on poverty and inequality depends on a number of factors, with the most important one being the distribution of economic growth between the rich and the poor. Originality/ Value: The Article is the originality and creativity of the researcher and has not published before.
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