Financial Development and Income in North Africa
International Advances in Economic Research, Vol. 14, No. 2, pp. 422-432, December 2008
Posted: 3 Aug 2009
Date Written: August 3, 2009
Abstract
We explore the short-run dynamics and long-run relationship between income and financial development in Algeria, Egypt, and Morocco. We use co-integration and VECM models and four indicators of financial development. The empirical results indicate that there is a long-run relationship between income and each financial development indicator, except credit to the private sector in Algeria. On the other hand, Granger-causality test results indicate that the evidence on the direction of causality is mixed.
Keywords: North Africa, Financial development, Economic growth, VECM, Arab countries
JEL Classification: E20, G40, G2
Suggested Citation: Suggested Citation