nep-fdg New Economics Papers
on Financial Development and Growth
Issue of 2015‒02‒22
five papers chosen by
Iulia Igescu
Ministry of Presidential Affairs

  1. Government spending in education and economic growth in Cameroon:a Vector error Correction Model approach By Douanla Tayo, Lionel; Abomo Fouda, Marcel Olivier
  2. Human capital, basic research, and applied research: three dimensions of human knowledge and their differential growth effects By Werner, Katharina; Prettner, Klaus
  3. Link between Economic Growth and Energy Consumption in Over 90 Countries By Sahbi FARHANI; Jaleleddine BEN REJEB
  4. Financial Development, Environmental Quality, Trade and Economic Growth : What Causes What in MENA Countries By Anis Omri; Saida Daly; Anissa Chaibi; Christophe Rault
  5. Can measures of broadband infrastructure improve predictions of economic growth? By Mayer, Walter J.; Madden, Gary; Dang, Xin

  1. By: Douanla Tayo, Lionel; Abomo Fouda, Marcel Olivier
    Abstract: This study aims at assessing the effect of government spending in education on economic growth in Cameroon over the period 1980-2012 using a vector error correction model. The estimated results show that these expenditures had a significant and positive impact on economic growth both in short and long run. The estimated error correction model shows that an increase of 1% of the growth rate of private gross fixed capital formation and government education spending led to increases of 5.03% and 10.145 % respectively in the long-run on economic growth . Education spending thus appears as one of the main driving force of the economic growth process in Cameroon.
    Keywords: Economic growth, VECM.
    JEL: H5
    Date: 2015–02–09
  2. By: Werner, Katharina; Prettner, Klaus
    Abstract: We analyze the di fferential growth e ffects of basic research, applied research, and embodied human capital accumulation in an R&D-based growth model with endogenous fertility and endogenous education. In line with the empirical evidence, our model allows for i) a negative association between long-run economic growth and population growth, ii) a positive association between long-run economic growth and education, and iii) a positive association between the level of per capita GDP and expenditures for basic research. Our results also indicate that raising public investments in basic research reduces the growth rate of GDP in the short run because resources have to be drawn away from other productive sectors of the economy. These short-run costs of basic research might be an explanation for the reluctance of governments to increase public R&D expenditures notwithstanding the long-run benefi ts of such a policy.
    JEL: O41 H41 J11
    Date: 2014
  3. By: Sahbi FARHANI; Jaleleddine BEN REJEB
    Abstract: This paper studies the relationship between economic growth (GDP) and energy consumption (EC) by using panel data for 95 countries from 1971 to 2008. The World Bank classification helps us to divide our 95 countries into four income groups of countries: low income group, lower-middle income group, upper-middle income group and high income group countries. To specify what matter, we use panel data analysis. The empirical results conclude that panel causality test results reveal that there is a long-run Granger causality running from GDP to EC for low and high income countries and bidirectional Granger causality between GDP and EC for the lower-middle and upper-middle income countries.
    Keywords: Economic Growth, Energy Consumption, Panel data analysis
    JEL: C33 O13 Q43
    Date: 2015–02–10
  4. By: Anis Omri; Saida Daly; Anissa Chaibi; Christophe Rault
    Abstract: This paper examines the relationship between financial development, CO2 emissions, trade and economic growth using simultaneous-equation panel data models for a panel of 12 MENA countries over the period 1990-2011. Our results indicate that there is evidence of bidirectional causality between CO2 emissions and economic growth. Economic growth and trade openness are interrelated i.e. bidirectional causality. Feedback hypothesis is validated between trade openness and financial development. Neutrality hypothesis is identified between CO2 emissions and financial development. Unidirectional causality running from financial development to economic growth and from trade openness to CO2 emissions is identified. Our empirical results also verified the existence of environmental Kuznets curve. These empirical insights are of particular interest to policymakers as they help build sound economic policies to sustain economic development and to improve the environmental quality.
    Keywords: Financial development, CO2 emissions, Trade, Economic growth, Simultaneous-equation models.
    Date: 2015–02–10
  5. By: Mayer, Walter J.; Madden, Gary; Dang, Xin
    Abstract: This paper investigates whether predictions of future economic growth can be improved by using standard measures of broadband infrastructure. The investigation is carried out by comparing the predictive accuracy of dynamic panel models of economic growth estimated with and without measures of broadband infrastructure. Tests of predictive accuracy are employed to test the hypothesis that measures of broadband infrastructure can improve predictions of GDP growth after controlling for standard growth determinants.
    Keywords: Broadband speed,economic growth,hypothesis tests,prediction
    Date: 2014

This nep-fdg issue is ©2015 by Iulia Igescu. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.