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on Financial Development and Growth |
| By: | Zaouali, Amira |
| Abstract: | Economists have a long argue that institutions and implementation of good governance are important for economic growth. The main objective of this research is to demonstrate that one of positive institutions effects is its ability to mitigate the negative effect of economic vulnerability linked to terms of trade fluctuations on economic growth. The impact of the economic vulnerability and implementation of good governance are estimated for a panel of 15 Sub-Saharan-Africa countries over the period 1996-2011. The results show that good institutional quality helps to undermine the negative effects of economic vulnerability on economic growth. It is also clear from this analysis that the interaction terms between trade openness and institutions can reduce the negative effects of economic vulnerability and that trade openness has a positive effect on economic growth only until a certain level of institutional quality. |
| Keywords: | Economic vulnerability, instability of terms of trade, economic growth, institutions. |
| JEL: | C23 O43 O47 |
| Date: | 2014–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:52939&r=fdg |
| By: | Phiri, Andrew |
| Abstract: | This paper investigates asymmetric co-integration and causality effects between financial development and economic growth for South African data spanning over the period of 1992 to 2013. To this end, we make use of the momentum threshold autoregressive (MTAR) approach which allows for threshold error correction (TEC) modelling and granger causality analysis between the variables. In carrying out our empirical analysis, we employ six measures of the financial development variables against gross domestic per capita, that is, three measures which proxy banking activity and another three proxies for stock market development. The empirical results generally indicate an abrupt asymmetric co-integration relationship between banking activity and economic growth, on one hand, and a smooth co-integration relationship between stock market activity and economic growth, on the other hand. Moreover, causality analysis generally reveals that while banking activity tends to granger causes economic growth, stock market activity is, however, caused by economic growth increase. |
| Keywords: | Financial development; Economic growth; Threshold co-integration; Asymmetric causality; Emerging economy; South Africa |
| JEL: | C32 E51 E58 G21 G23 G28 |
| Date: | 2014–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:53055&r=fdg |
| By: | Mohamed Arouri; Sahbi Farhani; Muhammad Shahbaz; Frédéric Teulon |
| Abstract: | This paper examines the impact of natural gas consumption, real gross fixed capital formation and trade on the real GDP in the case of Tunisia over the period 1980-2010. We use an Autoregressive Distributed Lag (ARDL) bounds testing approach to test the existence of a longterm relationship between the variables. The Vector Error Correction Method (VECM) Granger approach is applied to test the direction of the causal relation between the series. Our findings indicate the existence of a long-term relationship among the variables. Natural gas consumption, real gross fixed capital formation and trade add in economic growth. Natural gas consumption, real gross fixed capital formation and real trade Granger-cause real GDP. These findings open up new insights for policymakers to formulate a comprehensive energy policy to sustain economic growth in the long term. |
| Keywords: | Natural gas consumption, Economic growth, ARDL approach |
| JEL: | C7 D8 |
| Date: | 2014–01–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:201411&r=fdg |