FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH IN CAMEROON
- 발행기관 아주대학교
- 발행년도 2010
- 제출일 2010-08-11
- 학위수여년월 2010. 8
- 학위명 석사
- 학과 국제대학원 국제경영학과
- 실제URI http://www.dcollection.net/handler/ajou/000000011166
- 본문언어 영어
- 저작권 아주대학교 논문은 저작권에 의해 보호받습니다.
초록/요약
The causal relationship between financial development and economic growth is a controversial issue. For Cameroon, empirical studies have provided mixed result. This study seeks to empirically explore the relationship and the causal link between financial development and economic growth in Cameroon between 1970 and 2006. The empirical investigation is carried out using time methods and the five most commonly used indicators of financial development in the literature. However, the causal relationship was carried out using two different methods which are the autoregressive distributed lag bounds testing (ARDL) and the vector error correction model (VECM). Using this above methodology the study first found that in Cameroon, there is a positive and long-term relationship between all the indicators of financial development and economic growth which was proxied by the real per capita GDP. With respect to the causality test, the two methods used provide mixed results. In Cameroon the study found that financial development causes economic growth using the two methods.
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TABLE OF CONTENTS.
Acknowledgment-----------------i
Abstract-------------------------ii
Table of Contents----------------iii
List of Figures-------------------v
List of Tables--------------------v
CHAPTER I
Introduction-------------------1
1.2 Background to the study--------1
1.3 Problem statement-------------4
1.4 Objectives of the study---------7
1.5 Significance of the study-------8
CHAPTER II
The theory of Financial Development and Economic growth------------10
2.1 The Solow model of economic growth: ------------10
2.2 Why understand economic growth? ---------------12
2.3 The functions of a financial system: -------------14
2.3.1 Mobilizes savings: ---------------------------16
2.3.2 Facilitates risk management: ------------------16
2.4 The link between financial development and the real sector--------------17
2.4.1 Financial development improves household consumption: ------------17
2.4.2 Financial development increases investment: -----------18
2.5 The extent to which finance is important for growth: -------19
iv
CHAPTER III
THE RELATIONSHIP BETWEEN FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH IN CAMEROON. -------------------------21
3.1 Relationship between finance and economic growth: ---------22
3.2 Direction of causality between finance and economic growth: ----------23
3.2.1 Finance-led growth: -------------------------24
3.3 Indicators of financial development: ------------26
3.4 The level of financial development: -------------27
CHAPTER IV
OVERVIEW OF FINANCIAL SECTOR DEVELOPMENT IN CAMEROON FROM 1970 T0 2006. ------------------28
4.1 Economic growth experiences in Cameroon: --------28
4.1.1 The phase of economic expansion: --------------29
4.1.2 The phase of economic crisis: ------------------30
4.1.3 The phase of return to growth: ------------------30
4.2 Financial sector development in Cameroon: -------31
4.2.1 Cameroon’s financial sector: -------------------31
4.2.2 Financial indicator trends in Cameroon: ---------34
4.2.3 Indicators of financial widening: ----------------36
4.2.4 Indicators of financial deepening: ---------------36
4.2.5 The ratio of M1 to Gross Domestic Product (GDP):----------36
4.2.6 The ratio of M2 to Gross Domestic Product (GDP):----------37
4.2.7 The ratio of M1 to M2:---------------------38
4.2.8 Stock market development: ----------------40
v
CHAPTER V
METHODOLOGY AND DATA SOURCES. -------------41
5.1 Methodology: ----------------------------------41
5.2 Measurement of variables----------------------41
5.3 Definition of indicators: -------------------------41
5.4 Data sources: ---------------------------------43
5.5 Model specification: ---------------------------43
5.6 The Stationarity test: ---------------------------44
5.6.1 Stationarity Results: --------------------------45
5.7 Co-integration Test: ---------------------------47
5.7.1 Englar-Granger Two Step Approach: ----------47
5.7.2 Johansen Procedure: ------------------------47
5.7.3 Co-Integration Results: -----------------------49
5.8 Causality Test---------------------------------50
5.8.1 VECM Model: -------------------------------50
5.8.2 ARDL Model: --------------------------------56
5.9 Hypothesis Testing: ---------------------------58
CHAPTER VI
CONCLUSIONS AND POLICY RECOMMENDATIONS. ------59
6.1 Conclusion: -----------------------------------59
6.2 Policy recommendations: ----------------------60
BIBLIOGRAPHY: ----------------------------------62
Appendix: ----------------------------------------70
