The role of inflation in financial development–economic growth link in sub-Saharan Africa

The impact of financial development (FD) on economic growth (EG) is well documented. However, studies how inflation mediates the FD EG produce inconclusive findings. Meanwhile, tripartite relationship among FD, and particularly crucial for sub-Saharan African countries given that these are largely inflationary back under-developed sectors low EG. evidence presented by existing limits policy making. This study therefore re-examines whether FD–EG nexus utilizing a panel data obtained from 36 in Africa. uses sample splitting threshold approach to investigate this relationship. findings identify thresholds 7.65% 6.76% at which changes sign. Specifically, irrespective indicator higher significantly increases rates. beyond estimated thresholds, insignificant, revealing does not support growth-enhancing effect FD. research recommends should be kept below identified spur