We would like to introduce excellent research papers written by our alumni or current students in this section. In this issue we are posting a brief introduction of the following paper: “Stock market and economic growth in Ecuador” by Jessica Andrea Bolaños. (FMBA 2014)

This paper studies the relation between the stock market and economic growth in Ecuador and reviews the Ecuadorian stock market. Following the methodology of Pece (2015), the paper uses the logarithmic value of the Ecuadorian stock market index and real GDP data. The augmented Dickey-Fuller test shows that the two-time series have unit roots, but their first differences do not. To check whether the two series are co-integrated, the Johansen test is employed, and it showed that there is no co-integration. Thus, the paper conducts VAR (Vector Autoregression) of the first differences of the two series, i.e, changes in the stock and real GDP growth. The Granger causality test shows that the index increase Granger-causes the real GDP growth, but not vice versa. This result implies that activating the Ecuadorian stock market may contribute to the economic growth of Ecuador.

From September 2016, Jessica was promoted as Director of Reserve Management in the Central Bank of Ecuador. She is in charge of four departments: Reserve Operations, International Treasury, Operations Record, and Gold Trading. She has contributed much in the process of each department which has enabled better organizational performance. KGSF wishes her all the best in her new position and for a continually successful career.

-Subject: Stock market and economic growth in Ecuador
-Written by: Jessica Andrea Bolaños (2014, Central Bank of Ecuador)
-Advisor: Jangkoo Kang
*click here to see the paper