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Searching for the finance–growth nexus in Libya
Cevik, S ; Sharif University of Technology | 2020
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- Type of Document: Article
- DOI: 10.1007/s00181-018-1593-6
- Publisher: Springer , 2020
- Abstract:
- This paper investigates the causal relationship between financial development and economic growth in Libya during the period 1970–2016, providing new insights from a resource-dependent economy. The empirical results vary with estimation methodology and model specification, but indicate no long-run relationship between financial intermediation and nonhydrocarbon output growth. The OLS estimation shows that financial development has a statistically significant negative effect on real nonhydrocarbon GDP per capita growth. However, both the VAR- and ARDL-based estimations present statistically insignificant results, albeit still attaching a negative coefficient to financial intermediation. It appears that nonhydrocarbon economic activity depends largely on government spending, which is in turn determined by the country’s hydrocarbon earnings. © 2018, International Monetary Fund
- Keywords:
- Causality ; Cointegration ; Financial development ; VAR models ; Cointegration analysis ; Economic growth ; Empirical analysis ; Estimation method ; Finance ; Numerical model ; Vector autoregression ; Libyan Arab Jamahiriya
- Source: Empirical Economics ; Volume 58, Issue 2 , 2020 , Pages 567-581
- URL: https://link.springer.com/article/10.1007/s00181-018-1593-6