The Causal Relationship between Financial Development and Economic Performance in Tanzania

The study employs cointegration, vector error correction model and Granger causality test to ascertain causation between financial development and economic performance in Tanzania. Economic performance is measured by the real GDP, whereas proxies for financial development are: the ratio of money supply to nominal GDP; and growth of credit to private sector. The results show that there is a stable long-run relationship between financial development and economic performance in Tanzania. Granger causality test indicates that the causality runs from financial development to economic performance.


Issue Date:
Jan 01 2016
Publication Type:
Journal Article
ISSN:
1821-8148
Language:
English
Published in:
African Journal of Economic Review, Volume 04, Number 1
Page range:
170-184
JEL Codes:
E51; O11




 Record created 2017-10-25, last modified 2017-10-25

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