Frequency domain causality analysis of financial development and economic growth in Côte d’Ivoire

Abstract

In this study, we revisit the finance-growth nexus in Côte d’Ivoire using annual data over the period 1962-2020. We utilize the novel frequency domain causality test to identify the direction of the causality at different frequencies. The results vary depending on the financial development indicator and the time horizon. First, there is evidence of insignificant causality relationship between broad money and real GDP per capita. Second, there is evidence of unidirectional causality running from real GDP per capita to both domestic credit to private sectors ratios, only for low frequencies, suggesting a permanent or long-run effect.

Keywords

• financial development
• economic growth
• frequency domain causality test
• côte d’ivoire