This paper examines the causal relationship between Financial Inclusion and economic growth in the West African Economic and Monetary Union (WAEMU) from 2006 to 2015. We combined the heterogeneity panel causality test proposed by [1] with the Maximal Overlap Discrete Wavelet Transform (MODWT) to analyze the bi-directional causality at different time scales. We used two Financial Inclusion indicators: the overall rate of demographic penetration of financial services (Financial Inclusion supply) and the overall rate of use of financial services (Financial Inclusion demand). Our results show that at scale 1 (2-4 years), there is no causality between economic growth and Financial Inclusion indicators. However, at scale 2 (4-8 years), we found a bi-directional causality between economic growth and Financial Inclusion. Policymakers should therefore promote reforms that are beneficial to financial inclusion, especially on the supply side, while making the levers for macroeconomic growth more efficient, which also seems to be a decisive factor in financial inclusion.
This paper examines the spillovers in time and frequency from emerging (Brazil, Russia, India, China), developed (US, UK, France, Germany and Japan) stock markets and oil prices toward seven African stock markets. The spillovers are examined from 2005 to 2016, taking into account the recent financial crises and the recent oil prices fall. We combine the generalized Vector AutoRegressive (VAR) framework and the Maximum Overlap Discrete Wavelet Transform (MODWT) to obtain the spillovers at different time scales. The results show that the relationships between African stock markets, world stock markets and oil prices depend on time scales. African stock markets could be a way of capital diversification for global stock markets at scale 1 (2-4 weeks) and for investors active in the oil market at scale 2 (4-8 weeks).
This is a study on the integration between the six largest African stock markets at different timescales. The study determines whether the various measures and reforms undertaken to integrate the African stock markets have been effective. Wavelet methods and the Diebold and Yilmaz (2012) spillovers index were used. This approach allows an analysis in both time and frequency. The study results reveal that the integration of African stock exchanges is low at smaller time scales but tends to grow at larger timescales. Despite all the reforms, the transmission of financial information from one market to other remains slow. However, large-scale integration appears to decline in recent years. More effective policies are therefore needed for faster transmission and more efficient integration of African financial markets as well as for promoting exchanges between African stock markets.
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