Kappel, V (2009) explored the impact of financial liberalization on poverty and income inequality using panel and cross-national data from developed and developing countries. Applying OLS and 2SLS we find a significant negative relationship between financial development and income inequality. In developed countries, weak evidence has been found to support that financial development reduces income inequality, while in developing countries, financial liberalization has been found to increase income inequality. Pradhan (2010) examines the causal relationship between economic growth, financial development and poverty reduction in India during the period of 1951 to 2008. The empirical analysis uses cointegration and dynamic Granger causality. It was found that there is a long-run equilibrium relationship between financial development, economic growth and poverty reduction. The Granger causality test shows that there is one-way causality from poverty reduction to economic growth, from economic growth to financial development, and from financial development to poverty reduction and the economy. growth and poverty reduction. It also shows the absence of causality between financial development and economic growth, and between poverty reduction and financial development. The research study suggests that economic growth is of primary importance to stimulate financial development and both could play a vital role in poverty reduction. Jeanneney and Kpodar (2006) examine how financial development is useful for reducing poverty through the McKinnon conducted effect on the one hand and by promoting economic growth on the other. The study is conducted on a panel of developing countries in the period from 1966 to 2000, first using OLS and then using a dynamic panel Generalized Met...... middle of paper .......The bank of Albania (2009 ) examines the causal association between financial development and economic growth for the Albanian economy using the Granger causality test for five different proxies for financial development. For the non-stationary and non-cointegrated series, the VAR model was built and the above test was subsequently applied. For non-stationary series but with a cointegration relationship, the Granger-causality test was applied after the construction of the vector error correction model (VECM). The empirical results of the study show that there is a positive relationship between all indicators measuring financial development and long-term economic growth. In the short term, however, this relationship is rather vague as different indicators provide different results. The data used in this document belongs to the period 1996-2007.