Political Stability, Financial Crises And The Finance-growth Nexus: Evidence From Mena Region

Résumé: We re-examine the relationship between financial development and economic growth in MENA region. In particular, this paper investigates empirically the extent to which the finance-growth relationship is influenced by political stability and financial crises. To this end, tow linear models with interaction terms are estimated. Based on the estimation of the empirical model with linear interaction between financial development and political stability, our findings show that political stability appears a significant determinant of the finance-growth relationship. In fact, the results show that finance (represented by private credit, liquid liabilities and bank assets) has a negative effect on economic growth; however political stability mitigates the negative effect of financial development on economic growth. The interaction of financial development and financial crises does not appear strongly significant, which imply that financial crises do not appear relevant in the determination of the finance-growth relationship in MENA region

Publié dans la revue: مجلة الأصيل للبحوث الاقتصادية والإدارية