The Nexus of Financial Stability, Soundness, and Inclusion on Global Development Indicators

Abstract

This research meticulously investigates the multifaceted influence of financial stability, soundness, and inclusion on a comprehensive array of development indicators across diverse global economies, stratified by income levels. Employing a robust panel data methodology for the period 2008–2022, the study utilizes descriptive, correlation, and fixed pooled regression analyses. Data sources include authoritative global databases from the World Bank and the International Monetary Fund. The dependent variables span economic (inflation rate, current account balance), social (unemployment rate), environmental (CO2 and total greenhouse gas emissions), governance (democracy index), sustainability (sustainable development index), and human (human development index) dimensions. Our findings conclusively demonstrate that the impact of financial stability, soundness, and inclusion on these critical development indicators is highly heterogeneous across varying income-level economies, underscoring the nuanced and dynamic nature of these intricate relationships.