Topics in Middle Eastern and North African Economies

Document Type

Article

Publication Date

9-1-2019

Abstract

Using system panel GMM dynamic panel on a sample of nineteen MENA countries over the period 1990 – 2014, the study estimates the effect of financial stability on economic growth. Using the principal component analysis to create a composite index of financial stability consisting of a banking crisis dummy variable, the ratio of credit to government and state-owned enterprises to GDP, and the ratio of domestic credit to private sector as a percent of GDP, the estimation results show financial stability in the MENA region is important for boosting economic growth in the region. Furthermore, when dividing the sample between oil and non-oil exporters, the results suggests no statistically significant difference between the two groups in terms of the impact of financial stability on economic growth. Our results are robust to the use of different fixed effects and random effects estimation methodologies.

Journal Title

Topics in Middle Eastern and North African Economies

ISSN

2334-282X

Publisher

Middle East Economic Association and Loyola University Chicago

Volume

21

Issue

2

Comments

Presentation of the articles in the Topics in Middle Eastern and North African Economies was made possible by a limited license granted to Loyola University Chicago and Middle East Economics Association from the authors who have retained all copyrights in the articles.

Creative Commons License

Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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