An Econometric Analysis of the Nexus between Credit to the Private Sector, Inflation and Economic Growth: Case of Cameroon 1965 a 2010

Mba Fokwa Arsene; Dazoue Dongue Guy-Paulin

Authors

Mba Fokwa Arsene
Dazoue Dongue Guy-Paulin

Keywords:

credit to the private sector, inflation, growth, monetary policy

Abstract

This work is centered on bringing out the link between credit to the private sector, inflation and economic growth. When lending to the economy is insufficient, it poses a problem of slow growth and when credit to the economy is too high, it poses a problem of hyper-inflation. Using data from world development indicators, it employs a Vector auto regressive model involving a system of three equations, testing for the direction of causality amongst the variables using the VAR Granger causality block exogeneity Wald Tests. The results obtain shows that inflation has a positive and significant effect on growth, economic growth has a positive and significant effect on credit to the economy and credit to the economy has a negative and significant effect on inflation. Inflation granger causes economic growth, economic growth granger causes credit to the private sector and credit to the private sector granger causes inflation.

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How to Cite

An Econometric Analysis of the Nexus between Credit to the Private Sector, Inflation and Economic Growth: Case of Cameroon 1965 a 2010. (2014). Global Journal of Management and Business Research, 13(G7), 41-53. https://journalofbusiness.org/index.php/GJMBR/article/view/102324

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