Impact of derivatives markets on economic growth in some of the major world economies: A difference-GMM panel data estimation (2002-2014)

Abstract

The aim of this paper is to assess the impact of the derivatives markets on economic growth in six of the major world economies (the European Union, the United States, Japan, China, India, and Brazil) during the period 2002-2014. To do so, a dynamic panel data model is estimated with the Generalized Method of Moments (GMM). The main empirical finding is that, in these countries, derivatives markets have a positive influence on economic growth. The paper concludes with several recommendations that may help promote the use of derivative markets in order to boost economic growth.