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Financial Development, Financial Instability and Economic Growth: The Case of Maghreb Countries

Author

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  • Khattab Ahmed

    (Department of Economics, Abdelmalek Essaadi University, Tangier, Morocco,)

  • Mpabe Bodjongo Mathieu Juliot

    (Department of Economics, Faculty of Economics and Management Sciences, Yaound 2 University, BP 1365, Cameroun)

  • Ihadiyan Abid

    (Department of Economics, Abdelmalek Essaadi University, Tangier, Morocco.)

Abstract

The objective of this article consists in examining the interactions between the financial development, financial instability and economic growth in the Maghreb countries. The analysis covering the period of 1995-2013 relates to a sample of five countries of the region. By using the World Bank Data (2013) and the Heritage Foundation Data (2013), the panel vector autoregressive model estimation revealed that: (a) The financial development has positive effects on itself but a negative impact on the financial instability as well as a combined impact on the economic growth, (b) the financial instability has a negative impact on the financial development, a positive impact on itself and a combined effect on the economic growth, (c) The economic growth promotes the financial development and the financial instability; it has also a positive effect on itself, (d) finally, the financial liberalization in a less corrupt environment promotes the financial development.

Suggested Citation

  • Khattab Ahmed & Mpabe Bodjongo Mathieu Juliot & Ihadiyan Abid, 2015. "Financial Development, Financial Instability and Economic Growth: The Case of Maghreb Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 5(4), pages 1043-1054.
    • Handle: RePEc:eco:journ1:2015-04-26
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    2. M. Abdi Shalihin & Sugiharso Safuan, 2021. "Effects of Financial Inclusion and Openness on Banking Stability: Evidence from Developing and Developed Countrie," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 67, pages 212-222, Desember.

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    More about this item

    Keywords

    Financial Development; Financial Instability; Economic Growth;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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