Financial development and economic growth: the case of ECOWAS and WAEMU

Komivi Afawubo () and Vincent Fromentin ()

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Abstract: his study examines empirically the relationship between financial development and economic growth in the West African Economic and Monetary Union (WAEMU) for the period 1981-2010. Using the General Moment Method (GMM), the study found a positively and statistically significant effect of financial development on economic growth and the causality was bidirectional. In addition, the variable primary completion rate, foreign direct investment and real exchange rate contribute positively to economic growth in the region while inflation and openness discourage the economic growth in the region. In order to maintain a sustainable economic growth in those countries under study, the reforms for financial system improvement and education sector should be implemented. The policy makers should pursue target macroeconomic policies that may attract foreign direct investment while controlling for inflation and trade openness.

Keywords: Gestion des entreprises; Economie financière (search for similar items in EconPapers)
Date: 2013
Note: View the original document on HAL open archive server: https://hal.univ-lorraine.fr/hal-01369146
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Citations: View citations in EconPapers (2)

Published in Economics Bulletin, 2013, 33 (3), pp.624 - 632. ⟨10.5897/AJBM2015.7861⟩

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Journal Article: Financial development and economic growth: the case of ECOWAS and WAEMU (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01369146

DOI: 10.5897/AJBM2015.7861

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