7. Conclusion and future research directions
This paper has investigated linkages between financial instability, financial liberalisation, financial development and economic growth in African countries during the period 1985–2010, using a dynamic panel method. Two main findings are established. First, financial development and financial liberalisation have positive effects on financial instability. Second, economic growth reduces financial instability and the magnitude of reduction is higher in the pre-liberalisation period compared to post- liberalisation period. Future studies can improve extant literature by engaging cross-specific studies for more targeted policy implications. Moreover, assessing if the established linkages within empirical scrutiny in other regions is also worwhile.
