The Effects Of Macroeconomic Variables And Economic Union On Finance-Growth Nexus In West African Countries

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dc.contributor.authorEhigiamusoe, Kizito Uyi
dc.date.accessioned2018-01-16T02:40:09Z
dc.date.available2018-01-16T02:40:09Z
dc.date.issued2017-08
dc.description.abstractThis thesis examines the effects of macroeconomic variables and economic union on finance-growth nexus in West African region. Firstly, it examines the impact of financial development on economic growth using both panel data and disaggregated data for the 1980-2014 period. Secondly, it compares the finance-growth nexus in Union Économique et Monetaire Ouest Africaine (UEMOA) and non-UEMOA countries. Hence, it examines the effects of economic union on finance-growth nexus. Thirdly, it examines the effects of five macroeconomic variables (namely, inflation rate, real exchange rate, fiscal deficit relative to GDP, government debt relative to GDP and real interest rate) on finance-growth nexus. Evidence from the panel data show that financial development has positive impact on economic growth in the entire West African region, while the disaggregated data reveal that variations in financial development can explain variations in economic growth in 12 countries. Specifically, financial development has robust positive impact on economic growth in UEMOA countries, whereas the impact of finance on growth in non-UEMOA countries is weak. Also, it shows that economic union has no robust positive effects on economic growth through the financial sector in West African region. Furthermore, the thesis finds that the impact of financial development on economic growth varies with the levels of inflation rate, real exchange rate, government debt relative to GDP and real interest rate. Thus, these macroeconomic variables have deleterious effects on economic growth through the financial sector. This thesis reveals the countries where finance accelerates growth and countries where it does not. Knowing where finance spurs growth, and where it does not, is fundamental for policy making. The economic implication of this study is that an increase in financial development would not have the desirable economic benefits on economic growth except it is accompanied by macroeconomic stability. Hence, an increase in financial development and a reduction in macroeconomic instability would have greater long-run economic benefits compared to an increase in financial development in poor macroeconomic environment. Therefore, policies and reforms that would enhance the establishment and development of the financial sector should be priority for the government in order to stimulate economic growth. As a fundamental agenda in economic policy, government should employ the appropriate policies to ensure the achievement of macroeconomic stability with a view to achieving sustainable economic growth. Based on the findings, the study makes some policy recommendations.en_US
dc.identifier.urihttp://hdl.handle.net/123456789/5398
dc.language.isoenen_US
dc.publisherUniversiti Sains Malaysiaen_US
dc.subjectMacroeconomic variables and economic unionen_US
dc.subjecton finance-growth nexus in West African regionen_US
dc.titleThe Effects Of Macroeconomic Variables And Economic Union On Finance-Growth Nexus In West African Countriesen_US
dc.typeThesisen_US
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