*B.V. Patel Institute of Business Management, Computer & Information Technology, Uka Tarsadia University
**Department of Business Industrial Management, G.H Bhakta Management Academy VNSGU
Online published on 23 July, 2015.
This paper examines the relationship between total Bank credit, liquid liability and Gross domestic product in India over the period of 2000–2014. This study mainly focuses on direction of causality between financial development and economic growth of India. The ADF unit root test indicated that the variable of the study are stationary at second difference. Johnson Co-integration test proven that through trace statistic and Max Eigen Statistic LNM3 and LNTBC and LNGDP all are Co-integrated. LNGDP and LNM3 has Positive associate in the long run. LNGDP and LNTBC has negative associate in the long run. This study recommend that Liquid liability (Broad money) which is control variable is positive associate with economic Growth. Total Bank Credit has causality with GDP but it is negative associate with Indian economy.
Total Bank Credit, Broad Money, Gross Domestic product, Granger Causality
