BUDGET DEFICITS, CAPITAL IMPORTS AND SLOW GROWTH IN AFRICA: THEORY AND EVIDENCE

Date

1990

Author

ZIND, Richard G.

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This study examines the economic performance of 43 African nations over the decades of the 1960's and 1970s, with particular emphasis on government budget policy and its effect on national income and key sectoral variables, e.g. private sector consumption, investment and exports. Through a simple Keynesian model of income determination, we tested for possible crowding out of private sector spending. Next relating quantity to price changes, we assessed through regression analysis how the price-based income growth rates were related to the price-based growth rates of the sectoral variables. Finally, taking into account the effect of the investment growth rate on per capita income growth, we tested for income convergence among a subsample of countries.

URI

https://hdl.handle.net/11511/110963

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Department of Business Administration, Article