Author

Sasa Ostojic

Date of Award

January 2013

Document Type

Thesis

Degree Name

Master of Science (MS)

Department

Economics & Finance

First Advisor

Daniel Biederman

Abstract

The relationship between finance and economic growth is often studied using GDP per capita growth. This paper aims to focus on the richness of human life, not the richness of the economy. Thus, the Human Development Index is used to test the relationship between financial development and human development. By focusing on a sample limited to the European Union, the many criticisms associated with the use of an index can be mitigated. At this moment there is not a universally accepted measure of financial development. Use of measures from past literature allowed for consistency with past works. The results show that financial development has a strong positive relationship with human development and that several characteristics of the financial system are highly correlated with human development.

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