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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Financial Development and Economic Growth in Botswana: A Test for Causality
Author:Akinboade, Oludele AkinloyeISNI
Year:1998
Periodical:Savings and Development
Volume:22
Issue:3
Pages:331-348
Language:English
Geographic term:Botswana
Subjects:finance
economic development
Development and Technology
Economics and Trade
External link:https://www.jstor.org/stable/25830662
Abstract:Botswana has a small financial sector, dominated by the government, with a limited range of financial assets and undeveloped capital markets. Real assets are far more popular than financial assets. The country was poor until the discovery of diamonds in the 1970s. Economic growth since independence in 1966 has been rapid, even in the non-mining sectors, and by the 1980s the country was ranked as a lower middle-income country. The present article examines the relationship between financial development and economic growth in Botswana. Two indicators are used to examine Granger causality between real per capita income and financial development over the period 1972-1995. An error-correction method is adopted following the tests for unit roots and cointegration among the variables. The results suggest that per capita income and the indicators of financial development cause one another, indicating that the relationship between financial development and economic growth in Botswana is bi-directional. Bibliogr., sum. in English and French.
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