Alrayes, Massa Waddah (2005-05). Causality between financial development and economic growth: a case study on selected middle eastern countries. Master's Thesis. Thesis uri icon

abstract

  • This study empirically investigates the hypothesis of causality between financial development and economic growth in seven Middle East and North African countries from a time series perspective. I use ordinary least squares and vector auto regression estimations to infer Granger Causality, after controlling for a set of nonfinancial variables. Results show evidence of unidirectional and bidirectional causality between financial development and economic growth in four cases, no causality in two cases, and no significant relation between financial development and economic growth in one case. The significance of the relations varies on case-specific basis. I also control for three indices of civil liberties, economic and political freedom, and find significant evidence of an impact on GDP in three out of seven countries.
  • This study empirically investigates the hypothesis of causality between
    financial development and economic growth in seven Middle East and North African
    countries from a time series perspective. I use ordinary least squares and vector auto
    regression estimations to infer Granger Causality, after controlling for a set of nonfinancial
    variables. Results show evidence of unidirectional and bidirectional causality
    between financial development and economic growth in four cases, no causality in two
    cases, and no significant relation between financial development and economic growth
    in one case. The significance of the relations varies on case-specific basis. I also control
    for three indices of civil liberties, economic and political freedom, and find significant
    evidence of an impact on GDP in three out of seven countries.

publication date

  • May 2005