Question of causality between financial development and economic growth: The case of Algeria (1980-2017)

  • Nassima Bouras University of Oran 2
  • Hamza Fekir University of Oran 2
Keywords: financial development, economic growth, error correction model, Granger, causality

Abstract

In this article, we examine empirically the causal relationship between financial development and economic growth in Algeria during the period 1980-2017 via the error correction model. More precisely, the article aims to determine whether financial development causes Granger’s economic development in Algeria or vice versa. The empirical results of the study show that the financial sector has a positive effect on long-term economic growth. In addition, there is a unidirectional causal link from the financial sphere to the real sphere.

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Published
2020-06-18
How to Cite
Bouras, N., & Fekir, H. (2020). Question of causality between financial development and economic growth: The case of Algeria (1980-2017). Dirassat Journal Economic Issue, 11(2), 473-489. https://doi.org/10.5281/zenodo.3899421
Section
Articles