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Which is Leader in MENA region? Economic growth or financial development

Author

Listed:
  • Omid Ranjbar

    (M.A. in economics from Mazandaran University and Economic affairs expert of Mazand Tarh Consulting Engineers Co)

  • Zahra (Mila) Elmi

    (Economics Assistant professor in Mazandaran University)

  • Hamid Reza Jahany

    (Graduate student of Agricultural Economics, University of Zabol)

Abstract

There are vast literature about the relationship between financial development and economic growth. In most studies, the positive relation is approved while in few advocate that there is no relation. The positive relation may be from financial development to growth or vice versa or two ways. In this paper, the Granger causality relationship between financial development and economic growth is studied by the dynamic panel GMM-SYS approach and with two kinds of data, annual and five-non-overlapping data in MENA countries as a group. Five different measures of financial deepening are used to capture the variety of different channels through which financial development can affect growth. Results imply that a strong bi-directional causality between financial development and economic growth, but the relation from economic growth to financial development is stronger than vice versa direction.

Suggested Citation

  • Omid Ranjbar & Zahra (Mila) Elmi & Hamid Reza Jahany, 2009. "Which is Leader in MENA region? Economic growth or financial development," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 14(1), pages 131-153, spring.
    • Handle: RePEc:eut:journl:v:14:y:2009:i:1:p:131
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    References listed on IDEAS

    as
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