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The text Web site contains World Bank data on financial development. Using these data, compare bank loans as a percentage of GDP in two groups of countries: those in East Asia (8 countries) and those in sub-Saharan Africa (16 countries). For each group, compute the average of the bank-loan variable for three time periods: 1976-1985, 1986-1995, and 1996-2007.
a. Which of the two regions has a higher level of bank loans? How has the level of loans changed over time in each region?
b. What might explain the differences between East Asia and Africa that you found in part (a)? How do you think these differences have affected the economies of the two regions?
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