Financial Development and Economic Growth: Case of Mali

Abstract

This article examines the relationship between financial development and economic growth in Mali. The process by which financial development affects economic growth in Mali has been observed: first, by regressing a growth equation, and second, by Granger causality. To do this, the ordinary least squares method is used to estimate an error correction model over the period 1980-2015. The results obtained show that bank deposits and loans to the economy have a negative and significant effect on short-term economic growth. Moreover, the money supply has a negative and significant effect on economic growth in the short and long term. Moreover, public spending and trade openness has a positive and significant effect on economic growth, in the short and long term for the former and, in the long term for the latter. In addition, no Granger causal link was detected. A probable improvement lies in the continuation of the reforms, already undertaken by the CBWAS.