Investigation of Macro-Economic Factors Affecting Financial Fragility in G-20 Countries

This study examines the macroeconomic factors influencing financial fragility in G-20 countries, including both developed and emerging economies, between 2006 and 2021. The aim is to compare financial fragility in developed and emerging economies and identify key factors contributing to it. The dependent variable used is the financial fragility index, while independent variables include population growth rate, GDP, industrial growth, inflation rate, foreign direct investment, unemployment rate, consumer price index, current account balance, budget deficit, public debt, and import-export coverage ratio. The Dumitrescu-Hurlin Panel Causality Test was employed for the analysis. The findings reveal bidirectional causality between financial fragility and population growth rate, as well as public debt. Additionally, a one-way causality was observed from the unemployment rate to financial fragility and from financial fragility to inflation rate, current account balance, and budget deficit. These results highlight the complex interrelations between macroeconomic indicators and financial fragility, especially in the context of emerging economies.