In this paper, financial growth is observed in the context of Minsky’s theory. Based on literature review, it is possible that large financial depth could eventually entail financial instability. The size of the financial enlargement with potential threats of instability could be defined by the volume and accessibility in credit. For this purpose, the macroeconomic determinants of financial depth are empirically investigated by using annual time series data for a specific group of countries from the Balkan and the Eastern European region.
The economic system has become a matter of controversy. Most economies are currently functioning in an interdependent, globalized system. The amplification of the financial sector at the international level and the high degree of integration have rendered the debate on financial instability solemnly significant.
The goal is the identification of those factors with the greatest impact on the financial growth and, more precisely, those that stimulate credit as a key variable of financial enlargement. The impact is not only restricted to the positive movement.
All selected countries intentionally belong to a homogeneous group of economies in transition. Hence, a model based on panel data is constructed over a period from 1990 to 2020.
