Influence of Real Exchange Rate on the Finance-Growth Nexus in the West African Region

Ehigiamusoe, Kizito Uyi

doi:10.3390/economies7010023

Cited by 27 publications

(30 citation statements)

References 61 publications

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“…Chiang (2019) studied monthly data from 15 stock markets, along with economic policy uncertainty (EPU) as a news variable, and found that news is able to predict stock market future returns. Ehigiamusoe and Lean (2019) pointed out that financial development has a long-term positive impact on economic growth, while the real exchange rate and its volatility weaken this impact. The development of the financial sector will not bring ideal economic benefits unless it is accompanied by the decline and stability of the real exchange rate.…”

Section: Explaining Market Efficiency In Subdividing Areasmentioning

confidence: 99%

Review on Efficiency and Anomalies in Stock Markets

Woo

Mai²,

McAleer

et al. 2020

Economies

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The efficient-market hypothesis (EMH) is one of the most important economic and financial hypotheses that have been tested over the past century. Due to many abnormal phenomena and conflicting evidence, otherwise known as anomalies against EMH, some academics have questioned whether EMH is valid, and pointed out that the financial literature has substantial evidence of anomalies, so that many theories have been developed to explain some anomalies. To address the issue, this paper reviews the theory and literature on market efficiency and market anomalies. We give a brief review on market efficiency and clearly define the concept of market efficiency and the EMH. We discuss some efforts that challenge the EMH. We review different market anomalies and different theories of Behavioral Finance that could be used to explain such market anomalies. This review is useful to academics for developing cutting-edge treatments of financial theory that EMH, anomalies, and Behavioral Finance underlie. The review is also beneficial to investors for making choices of investment products and strategies that suit their risk preferences and behavioral traits predicted from behavioral models. Finally, when EMH, anomalies and Behavioral Finance are used to explain the impacts of investor behavior on stock price movements, it is invaluable to policy makers, when reviewing their policies, to avoid excessive fluctuations in stock markets.

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Section: Explaining Market Efficiency In Subdividing Areasmentioning

confidence: 99%

Review on Efficiency and Anomalies in Stock Markets

Woo

Mai²,

McAleer

et al. 2020

Economies

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“…Nonetheless, the frontier of recent literature is shifting towards the examination of the variables that could influence the finance‐growth nexus. The impact of finance on growth could be influenced by the quality of institutions, level of income, level of financial deepening, structure of the financial system, real exchange rate and inflation rate (Ehigiamusoe and Lean, ; Ehigiamusoe et al , ; Law et al , ). But the influence of economic union on the finance‐growth nexus has not been given adequate consideration in previous studies.…”

Section: Introductionmentioning

confidence: 99%

Economic Union, Finance and Growth: A Prognosis in West Africa

Ehigiamusoe¹

2019

African Development Review

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This paper compares the impact of financial development on economic growth in the Union Économique et Monetaire Ouest Africaine (UEMOA) and non-UEMOA countries. It also examines the finance-growth nexus before and after the formation of UEMOA, as well as the indirect effect of economic union on economic growth through the financial sector. The study reveals a significant difference in the finance-growth nexus between UEMOA and non-UEMOA countries. Specifically, financial development has a robust positive impact on growth in UEMOA countries, while the impact is tenuous in non-UEMOA countries. However, we find no remarkable difference in the finance-growth nexus before and after the formation of UEMOA. We also reveal that economic union has no robust indirect effect on economic growth via the financial sector. The economic implication is that UEMOA could have economic benefits, but financial development is not a channel through which it influences growth. Therefore, it is necessary to reposition the union so that it can enhance the impact of finance on growth.

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“…Inflation is expressed as the percentage change in the aggregate price level over a period of time, typically a year (Ball, 2011). Ehigiamusoe & Lean (2019) expressed the inflation rate as macroeconomic instability.…”

Section: Introductionmentioning

confidence: 99%

Economic Growth: How Inflation and the Exchange Rate Work Through the Stock Market as a Mediating Variable

2019

BER

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This study aims to investigate the impact of inflation and the exchange rate on economic growth through the stock market as a mediating variable. The analysis tool used a path model with monthly data. The research period lasted for 14 years from 2004 to 2017. The data was obtained from the Central Statistics Bureau, Bank Indonesia and Jakarta Stock Exchange. Case studies were conducted in Indonesia and the researcher took the Consumer Goods Index as a variable in the stock market. The results show that inflation and the exchange rates do not significantly affect economic growth through the stock market. Alternatively, the stock market is not an excellent mediating variable between inflation and the exchange rate on economic growth. The size of the stock market and the awareness of domestic investors when accessing the stock market is thought to be the factors that influence how the inflation and exchange rates work.

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Influence of Real Exchange Rate on the Finance-Growth Nexus in the West African Region

Cited by 27 publications

References 61 publications

Review on Efficiency and Anomalies in Stock Markets

Review on Efficiency and Anomalies in Stock Markets

Economic Union, Finance and Growth: A Prognosis in West Africa

Economic Growth: How Inflation and the Exchange Rate Work Through the Stock Market as a Mediating Variable

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