The Impact Of Financial Instability On African Economic Growth ——An Empirical Study Based On 15 African Countries

Financial instability means that after the financial system is disturbed by the outside world,its key functions can no longer be effectively implemented.Financial instability has a greater negative impact on economic development,especially its highest level of manifestation,the financial crisis,which has brought heavy losses to the world economy.Therefore,it is particularly important to study the measurement of financial instability and its impact on macroeconomic growth.Based on the existing theoretical research on financial instability and economic growth,this paper establishes a benchmark index of liquidity from the perspective of capital liquidity,taking M2/M1 as an important indicator and proxy variable to measure financial instability in Africa,so as to study in detail the impact of financial instability on the economic growth of 15 African countries.The negative effects of financial instability on the macroeconomic development of various countries have received extensive attention and in-depth research in the theoretical community.At the same time,financial instability,as the normal operation of the economic system,has also caused the financial structure and economic system arrangements of various countries or economies.The study of its impact on the macro-economy is of great significance to the management of the national economy.On the other hand,under the background of economic and financial globalization,the process of financial liberalization in African countries has gradually accelerated,capital markets have gradually opened up,and the connection with the world financial market has become increasingly close.Economic development,especially financial markets,are facing instability factors.It will inevitably increase.Financial instability has not only become a key issue in Africa?s financial development,but also has a major impact on Africa?s macroeconomics.At present,articles studying the impact of changes in the financial environment on the African economy are mostly focused on macroscopic studies such as status quo analysis,influencing factors,and mechanisms.Few articles have specifically conducted case analysis and empirical research on African countries.This article aims to analyze the impact of financial instability on the economic growth of African countries,and then conduct a heterogeneous analysis of how financial instability affects the economic growth of certain African countries.Specifically,this article studies the impact of financial instability on the economic growth of 15 African countries from 1980 to 2019 and its heterogeneous impact.First,this article assesses the impact of financial instability on the economic growth of 15 African countries from 1980 to 2019.Then,this article further divides 15 African countries into four categories,namely: Economic Community of Central African States,Development of Southern Africa Community,Economic Community of West African Countries and East African Countries.The results show that financial instability does hinder the economic development of African countries,and the economically underdeveloped Central Africa and South Africa countries are more affected.That is,the lower the degree of development in Africa,the greater the impact.In addition,investment,debt servicing,exports,and consumption all contribute to the economic growth of African countries,that is,the GDP growth rate.