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Abstract
Abstract
This study examines the relationship between financial development and human development in Hungary during 1970-2019. For this purpose, the autoregressive distributed lag approach and the bounds test were performed, which revealed the presence of a cointegration relationship between the two variables. The empirical findings revealed that the overall effect of financial development on human capital can be positive or negative, depending on the variables used, and several robustness tests confirmed these results. The analysis also identifies the primary policy possibilities by which improvements in financial reforms impact human capital. Eliminate inefficiencies in spending in order to achieve high efficiency in education and health care, particularly in terms of both quality and inclusion.
Keywords: Finance; the autoregressive distributed lag approach; human capital; Hungary.
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