Financial development and Economic growth in the Democratic Republic of the Congo: Supply leading or Demand following?
Christian Pinshi () and
Anselme M. Kabeya
MPRA Paper from University Library of Munich, Germany
The purpose of this paper is to verify the direction of the relationship between financial development and economic growth in the Democratic Republic of the Congo (DRC). Using Granger's causality framework, the results indicate that there is a robust, one-way relationship ranging from economic growth to financial development. This result validates Demand following hypothesis in the DRC. Consequently, policies aimed at supporting economic growth, such as the accumulation of endogenous factors (knowledge, education, research), macroeconomic stabilization, reconstruction of infrastructure, structural reforms, creation of a good economic environment for the private and regulatory sectors, and good governance are very important for improving financial development in the DRC.
Keywords: Economic growth; financial development; Democratic Republic of the Congo (search for similar items in EconPapers)
JEL-codes: C32 E44 G20 G28 O16 O38 O44 (search for similar items in EconPapers)
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Working Paper: Financial development and Economic growth in the Democratic Republic of the Congo: Supply leading or Demand following? (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:101459
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