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The Econometric Estimation of Macroeconomic Effect of Financial Development on Economic Growth in Cote d’Ivoire: A Long and Short Run Analysis, 1970-2014

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  • Drama Bédi Guy Hervé

Abstract

The aim of this article was to investigate empirically the link between financial development and economic growth in Cote d’Ivoire using time series data covering the period of 1970-2014, both in short and long run. The Error correction model and cointegration method were performed to capture the short and long run dynamics of this relationship respectively. The cointegration test result showed evidence of long-run and significant causal between financial development and economic growth in Cote d’Ivoire during the study period. Furthermore, the coefficient of the error correction term (ECT) in the short-run dynamic model was statistically insignificant with inappropriate sign and weak. Consequently, the empirical evidence suggests that countries authorities should promote domestic private credit to boost liquidity level to ensure long-term price stability and strengthen local industries production capacities.

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  • Drama Bédi Guy Hervé, 2016. "The Econometric Estimation of Macroeconomic Effect of Financial Development on Economic Growth in Cote d’Ivoire: A Long and Short Run Analysis, 1970-2014," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(7), pages 284-284, July.
    • Handle: RePEc:ibn:ijefaa:v:8:y:2016:i:7:p:284
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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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