Publications /
Paper in Academic Journals

Back
Does less finance harm economic growth as well? A nonlinear smooth transition model (STAR) perspective
Authors
Zakaria Elouaourti
November 14, 2024

This paper was originaly published on tandfonline.com

 

Our study provides an in-depth examination of the relationship between financial development and economic growth in Morocco, revealing key threshold effects through a nonlinear smooth transition model (STAR). Analysis of Moroccan banking and stock market development indexes reveals that the stock market was significantly impacted by the 2008 global financial crisis, showing a decline, while the banking system continued an upward trajectory. STAR model estimation further underscores a nonlinear relationship, marked by three structural breaks over the 1987–2020 period. The novelty of this paper stems in the fact that it is the first in the literature to test the hypothesis ‘Does less finance harm economic growth as well?’ instead of the famous debate triggered by the 2008 global financial crisis ‘Does too much finance harm economic growth?’ Which led us to identify the threshold below which the Moroccan financial sector harms economic growth and which corresponds to 0.32 on the scale of our index.

RELATED CONTENT

  • Authors
    Fernando S. Perobelli
    Inácio F. Araújo
    Tomaz P. Dentinho
    March 16, 2021
    Angola’s prospects for reconstruction and development of its poor connectivity infrastructure are heavily dependent upon the export performance of its oil sector. Using an interregional inputoutput table for Angola, we estimate comprehensive measures of trade in value added revealing different hierarchies of interregional and international trade integration, with implications for regional inequality in the country. By encompassing the subnational perspective in the case study of an ...
  • Authors
    March 3, 2021
    Brazil, an oil-exporting nation, was still struggling to recover from the depression which started around 2014/15 when it was hit by a quick succession of shocks: the COVID-19 pandemic and the oil price collapse. The global pandemic triggered major economic dislocations and contractions in foreign and domestic markets, which further exacerbated the fall in demand for oil, sending world prices tumbling further. Poverty was already widespread in Brazil pre-pandemic. And despite recen ...
  • March 02, 2021
    The Covid-19 pandemic has severely damaged the global economy. Confinement policies, global value chains disruption and risk aversion in the financial systems markets have brought the glo ...
  • Authors
    February 26, 2021
    Economic development analysis must inevitably rely on a double methodological standpoint. On the one hand, it needs to search for common features, those general attributes that might be present in all national experiences of wealth accumulation, poverty reduction, and moving up the income ladder. On the other, in order to be meaningful, it must reckon with time and space. It must consider that those universal development traits will play out in specific historical and geographical c ...
  • February 24, 2021
    L'intégration régionale en Afrique est considérée comme une priorité par de nombreux responsables politiques et acteurs économiques du continent. Avec la signature de l'accord portant création de la ZLECAf par l'ensemble des pays africains, le défi consiste désormais à mettre en place un marché continental pour les biens et les services et à jeter les bases d'une union douanière continentale. Nombreux sont ceux qui, sur le continent, considèrent la ZLECAf comme un plan d'investissem ...
  • Authors
    February 17, 2021
    La vanille est un produit d’exportation phare de Madagascar qui dispose, pour cette matière première unique, d’un quasi-monopole mondial. Si les recettes d’exportation qui en découlent sont essentielles pour l’île Rouge, leur variabilité, conjuguée à celle d’autres produits, tels que le nickel, n’est pas sans poser d’importants problèmes macroéconomiques en raison de la faible diversification de sa balance commerciale. Conséquence de la chute des cours depuis les sommets atteints en ...