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Short-Versus Long-Term Credit and Economic Performance: Evidence from the WAEMU

May 01, 2010 | K. Kpodar, K. Gbenyo | IMF
This paper studies the link between financial development and economic growth in the West African Economic and Monetary Union (WAEMU). Using panel data for WAEMU countries over the period 1995-2006, the results suggest that while overall financial development does support growth in the region, long-term bank financing has a greater impact on economic growth than short-term financing because long-term projects have higher returns adjusted for risks