## Searching for the Finance-Growth Nexus in Libya

_IMF Working Papers, May 1, 2013_

## Source details

**Canonical URL:** [Searching for the Finance-Growth Nexus in Libya](https://www.imf.org/en/publications/wp/issues/2016/12/31/searching-for-the-finance-growth-nexus-in-libya-40492)

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## Bibliographic details
- Authors: Serhan Cevik, Mohammad Rahmati
- Published: May 1, 2013
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484385883.001

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### Research question and scope
- Investigates the causal relationship between financial development and economic growth in Libya during the period 1970–2010.
- Focus on nonhydrocarbon output and the role of financial intermediation.

### Methodology
- Employs multiple estimation methodologies and model specifications, including OLS and VAR-based estimations.
- Uses causality and cointegration techniques; references VAR models.

### Key empirical findings
- Empirical results vary with estimation methodology and model specification, but indicate the lack of long-run relationship between financial intermediation and nonhydrocarbon output growth.
- OLS estimation shows that financial development has a statistically significant negative effect on real nonhydrocarbon GDP per capita growth.
- VAR-based estimations present statistically insignificant results, albeit still attaching a negative coefficient to financial intermediation.
- Nonhydrocarbon economic activity appears to depend largely on government spending, which is in turn determined by the country’s hydrocarbon earnings.

### Thematic keywords and subject areas
- Subject: Commercial banks; Credit; Expenditure; Financial institutions; Financial markets; Financial sector development; Money; Oil prices; Prices.
- Keywords: causality; cointegration; Commercial banks; Credit; economic growth; finance-growth nexus; Financial development; Financial sector development; GDP growth; hydrocarbon GDP; Oil prices; rate of change; VAR models; well-functioning financial system; WP.

### Publication metadata (from source)
- Pages: 21
- Volume: 2013
- Issue: 092
- Series: Working Paper No. 2013/092
- Stock No: WPIEA2013092
- ISBN: 9781484385883
- ISSN: 1018-5941
- DOI: https://doi.org/10.5089/9781484385883.001

*Source: IMF Working Papers — "Searching for the Finance-Growth Nexus in Libya" by Serhan Cevik and Mohammad Rahmati (May 1, 2013).*

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/searching-for-the-finance-growth-nexus-in-libya-40492_