文档介绍：Causality in Finance and Growth: The Case of a Small Open Economy
VINAY PRASANDJEET NUNDLALL
International Business School
Brandeis University
Waltham
MA 02452-9110
USA
ABSTRACT
This paper investigates causality between economic growth and financial development in Mauritius over the period 1968 through to 2004. Using Engle and Granger error correction methodology with annual data, we find that financial intermediation has been contributing to growth in Mauritius since independence. However, the equity market has not had any impact on the economy during its relatively shorter life span. A channel of growth from financial intermediation to the construction sector is identified. The study also finds that exports also have had a significant impact on growth, lending support to the export led growth strategy adopted by the authorities.
Introduction
The UNDP 2003 Human Development Index ranks Mauritius sixty second overall and third behind the Seychelles and Libya among African countries. Based upon GDP per capita, Mauritius ranks third among African countries, behind the Seychelles and Republic of South Africa. Mauritius is a small, densely populated island of million inhabitants living in an area of 1,860 square kilometers (720 square miles). The island does not have any natural mineral resources and has relied heavily on its monocrop sugar sector for exports during most its life as an independent nation. Situated about 1,000 km (620 miles) off the eastern coasts of Africa in the Tropic of Capricorn, it is a victim of the vagaries of the Indian Ocean’s tropical climate. However, its volcanic origin has endowed it with beautiful sandy beaches and a calm blue lagoon which has made it a popular holiday resort for European and South African tourists and made tourism an important sector of the economy.
Economic history teaches us that Mauritius was never destined to achieve economic ess because, as Meade reports in 1961, the island was a crucible waiting to ex