The linkages between financial deepening, trade openness, and economic growth in the West African Economic And Monetary Union (WAEMU)

This paper examines the linkages between financial deepening, trade openness and economic growth in the West African Economic and Monetary Union (WAEMU). This is important because the literature on this crucial topic is scant in the case of WAEMU. The paper seeks to specifically examine whether by introducing trade openness into the finance-growth nexus, the causal direction will change. The paper uses a panel of eight (8) countries covering the period 1992 - 2009. It finds a distinct unidirectional causality flowing from financial deepening to economic growth via trade openness.