Financial Development and Economic Growth in Tanzania: A Dynamic Casualty Test
This study investigates empirically the role of financial development on economic growth in Tanzania. Unlike many previous studies, the study uses three proxies of financial development against real GDP per capita (a proxy for economic growth). Using the Johansen-Juselius cointegration method and vector error-correction mechanism, the empirical results of this study, taken together, reveal a bidirectional casuality between financial development and economic growth in Tanzania - although a supply-leading response tends to predominate. When the ratio of broad money to GDP (M2/GDP) is used, a distinct supply-leading response is found to prevail. However, when the ratio of currency to narrow definition of money (CC/M1) and the ratio of bank claims on the private sector to GDP (DCP/GDP) are used, a bi-directional causality evidence seems to prevail. The study therefore recommends that the current financial development in Tanzania be developed further in order to make the economy more monetised.
Volume (Year): 7 (2005)
Issue (Month): 1 ()
|Contact details of provider:|| Postal: PO Box 3628, Tygervalley, Bellville, 7536|
Web page: http://www.africagrowth.com/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:afj:journl:v:7:y:2005:i:1:p:1-17. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kirk De Doncker)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.