THE NEXUS AMONG FINANCIAL DEVELOPMENT AND POVERTY REDUCTION: AN APPLICATION OF ARDL APPROACH FROM THE MENA REGION

Leila Chemlı

doi:10.15637/jlecon.46

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Year 2014, Volume: 1 Issue: 2, 133 - 148, 30.10.2014

Leila Chemlı

https://doi.org/10.15637/jlecon.46

Abstract

The objective of this paper is to examine the relationship between financial development and poverty reduction in 8 MENA countries (Algeria, Egypt, Iran, Jordan, Mauritania, Morocco, Tunisia and Yemen) over the period of 1990-2012 by using an “ARDL approach”. Our empirical results show that the financial development favors the poor. The ratio to domestic credit to the private sector as % of GDP is significant and positive for Algeria, Iran, Jordan, and Tunisia. This country represents a sample of the upper-middle-income economies. While the ratio to liquid liabilities (M3) as % of GDP is significant and positive for our entire sample. This result suggests that access to credit for the poor remains a challenge.

Keywords

financial development, poverty reduction, ARDL approach.

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