Empirical study of the relationship between financial development and economic growth in the WAEMU

Soro Sonfoungowari Mathieu

doi:10.47297/wspceWSP2516-251902.20220606

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Empirical study of the relationship between financial development and economic growth in the WAEMU

Volume 6, Issue 6

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Empirical study of the relationship between financial development and economic growth in the WAEMU
Empirical study of the relationship between financial development and economic growth in the WAEMU
School of Management and Economics, Hubei University of Technology, Wuhan, Hubei 430068, P.R.China
Vol. 6, Issue 6, Pages: 18-29(2022)
Published： 30 December 2022 ，
DOI：10.47297/wspceWSP2516-251902.20220606
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Mathieu Soro Sonfoungowari.Empirical study of the relationship between financial development and economic growth in the WAEMU[J].Creative Economy,2022,06(06):18-29.
DOI：

Mathieu Soro Sonfoungowari.Empirical study of the relationship between financial development and economic growth in the WAEMU[J].Creative Economy,2022,06(06):18-29. DOI： 10.47297/wspceWSP2516-251902.20220606.

摘要

Abstract

This article analyses the effectiveness of the financial system in economic development using data from 8 WAEMU countries over the period 1990-2021. It draws on the dynamic panel work of Arellano-Bond to specify the nonlinear model of growth

which is estimated by the Generalized Moments method in system results. The effect of financial development on economic growth is U-shaped. The research results show that the negative impact of financial growth on economic growth reaches a critical value

and after exceeding this critical value

financial growth ultimately promotes economic growth. The West African Economic and Monetary Union (WAEMU) zone should establish a Financial Stability Authority whose main mandate is to ensure the stability of the financial system of WAEMU member countries. Too high a level of financial development could damage GDP growth. Financial development therefore appears to be a necessary but not sufficient condition for economic growth.

关键词

Keywords

Financial developmentEconomic developmentWAEMU

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