The Relationship Between Financial Inclusion Initiatives and Economic Growth in Developing Economies

Posted: Dec 09, 2023

• Noah Hill
• Noah Johnson
• Olivia Anderson

Abstract

The relationship between financial inclusion and economic development has emerged as a critical area of inquiry in development economics and computational social science. Financial inclusion, defined as the availability and equality of opportunities to access financial services, represents a fundamental mechanism through which individuals and businesses can participate in formal economic systems. Traditional approaches to studying this relationship have primarily relied on econometric models that establish correlations between financial inclusion indicators and macroeconomic growth metrics. However, these methods often fail to capture the complex, dynamic interactions between financial institutions, government policies, and individual economic agents that characterize real-world financial ecosystems in developing economies. This research introduces an innovative computational framework that addresses these limitations by modeling financial inclusion as a complex adaptive system. Our approach moves beyond static correlation analysis to examine how financial inclusion initiatives propagate through economic networks, how they interact with existing institutional structures, and how they generate emergent economic behaviors at both micro and macro levels. The novelty of our methodology lies in its integration of multi-agent simulation, machine learning, and evolutionary algorithms to create a dynamic model that can simulate the long-term effects of various financial inclusion strategies under different economic conditions.