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Financial Development and Economic Growth: The Empirical Evidence of the Southern Mediterranean Countries

Author

Listed:
  • Mohamed Aydi

    (Faculty of Economic Sciences and Management of Sousse, Tunisia,)

  • Abdelkader Aguir

    (BETA Lab UMR 7522 University of Lorraine and UR MOFID UR 13-ES60, France.)

Abstract

This paper analyzes empirically the links between financial development and the economic growth of the (squared multiple correlation). The study is based on a vector autoregression approach: The Johansen tests for cointegration and vector error correction model models. The debate on the relation between the financial sphere and the real economic sphere was very ambiguous some studies have shown a positive association between these two spheres while others presented the opposing view perfectly. On the basis of the data relative to the PSM, observed during period 1981-2014, we tried to show there is or not a positive relationship between the financial development and the economic growth. This relationship and increasingly intense for the role of the banking development and and refers to an innovation effort and modernization of the financial system.

Suggested Citation

  • Mohamed Aydi & Abdelkader Aguir, 2017. "Financial Development and Economic Growth: The Empirical Evidence of the Southern Mediterranean Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 7(3), pages 196-209.
    • Handle: RePEc:eco:journ1:2017-03-27
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    References listed on IDEAS

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    More about this item

    Keywords

    Financial Development; Economic Growth; Southern Mediterranean Countries; Vector Autoregression Approch;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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