Ehigiamusoe, Kizito Uyi, Lean, Hooi Hooi and Chan, Jin Hooi ORCID: 0000-0002-6275-9763 (2019) Influence of macroeconomic stability on financial development in developing economies: evidence from West African region. The Singapore Economic Review, 65 (4). pp. 837-856. ISSN 0217-5908 (Print), 1793-6837 (Online) (doi:https://doi.org/10.1142/S0217590819500553)

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Abstract

This paper examines the effects of macroeconomic stability on the financial development in the West African region. Macroeconomic stability is measured based on the five variables of the Maastricht Criteria (inflation rate, real exchange rate, government debt, fiscal deficit and real interest rate). This study employs novel dynamic models on panel data. The results suggest that macroeconomic stability has significant effects on financial development in the region. Specifically, inflation rate, real exchange rate and fiscal deficit have negative effects. The effects of government debt and real interest rate are positive. This study confirms that the five macroeconomic stability variables are the determinants of financial development. Hence, developing economies should strive to achieve macroeconomic stability in order to drive financial development and to achieve sustainable economic development.

Item Type:	Article
Uncontrolled Keywords:	macroeconomic stability, financial development, economic growth, sustainable economic development, developing economies
Subjects:	H Social Sciences > HB Economic Theory
Faculty / School / Research Centre / Research Group:	Faculty of Business Faculty of Business > Department of Systems Management & Strategy Faculty of Business > Networks and Urban Systems Centre (NUSC) Faculty of Business > Networks and Urban Systems Centre (NUSC) > Supply Chain Management Research Group
Last Modified:	29 Oct 2020 01:38
URI:	http://gala.gre.ac.uk/id/eprint/17629

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