Please use this identifier to cite or link to this item: http://hdl.handle.net/123456789/2642
Title: THE CAUSAL RELATIONSHIP BETWEEN FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH IN AFRICA
Authors: Opoku, Eric Evans Osei
Ibrahim, Muazu
Sare, Yakubu Awudu
Keywords: Financial development
Economic growth
Frequency domain
Causality
Africa
Issue Date: 2019
Publisher: Taylor & Francis Group
Abstract: Previous empirical studies on the causal relationship between financial development and economic growth are not instructive given their failure to unearth the causality trend across the different time periods. Using a more recently developed and robust indicator of financial development, we revisit the causal relationship between financial development and economic growth within the framework of a frequency-domain spectral causality technique which allows the causality to vary across time. Using data from 47 African countries over the period 1980–2016, our findings largely suggest that, even though there is some evidence of demand-following, supply-leading and feedback hypotheses, for most part, we find strong support of neutrality hypothesis.Thus, financial development and economic growth at most frequency levels evolve independently. We infer that caution must be exercised in making general conclusions about the causal nexus between financial development and economic growth.
URI: http://hdl.handle.net/123456789/2642
ISSN: 0269-2171
Appears in Collections:School of Business and Law

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