Does Insurance Promote Economic Growth?: Evidence from OECD Countries by DAMIAN WARD LECTURER IN ECONOMICS UNIVERSITY OF BRADFORD MANAGEMENT CENTRE RALF ZURBRUEGG SENIOR LECTURER IN FINANCE SCHOOL OF BANKING AND FINANCE

This paper examines the short and long run dynamic relationships exhibited between economic growth and growth in the insurance industry for nine OECD countries. This is achieved by conducting a cointegration analysis on an unique set of yearly data for the level of real GDP and total real premiums issued in each country from 1961 to 1996. Causality tests are then also conducted whilst accounting for long-run trends within the data. The results from the tests indicate that in some countries the insurance industry promotes economic growth, and in other countries the reverse is true. These set of results indicate that these relationships are country specific and any discussion of whether the insurance industry does promote economic growth will be dependent on a number of national circumstances.