Chapter 10: The Impact of Financial Stability on Economic Growth in Light of Digital Transformation

In light of the accelerating digital transformation, financial stability emerges as a vital element for achieving sustainable economic growth. Stable financial systems enable economies to capitalize on digital opportunities and mitigate their risks. Financial stability refers to the ability of the financial system to operate efficiently and absorb shocks without market disruption. This instills confidence in investors and encourages savings and investment. The importance of financial stability lies in its role in enhancing transparency, reducing market volatility, and supporting effective economic policies. Conversely, economic growth is a key indicator of development and reflects the sustained expansion of production and income. Its types vary between intensive and expansionary, real and nominal, balanced and unbalanced, while its theories are based on classical and modern concepts such as Adam Smith’s theory, Solow’s theory, and endogenous growth. Digital transformation is the process of integrating modern technologies into economic and administrative activities, using tools such as artificial intelligence and cloud computing. It aims to increase efficiency and develop business models. Its success requires a robust infrastructure that includes digital technologies, information security, and digital operations management. The findings indicate that financial stability provides a secure and attractive digital environment for investment and contributes to protecting the economy from the risks of digital transformation, enhancing the effectiveness of digital policies, and achieving a balance between innovation and market stability. Therefore, the relationship between financial stability and digital transformation is complementary and essential for achieving sustainable economic growth in the digital age.