Macro Economics
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- ItemANALYSING THE EFFECT OF BUDGET DEFICIT DYNAMICS ON MACROECONOMIC VARIABLES IN NAMIBIA(University of Namibia, 2021-10-08) HANGO, ANNA LIISAThis study analysed the effect of budget deficit dynamics on economic growth (gross domestic product), unemployment and interest rate in Namibia. The study employed the Autoregressive Distributed Lag Model (ARDL) and Bounds test for the cointegration approach using time series annual data for the period 1990 – 2018. The cointegration results confirm the presence of a long run relationship among variables in all models. In order to capture the short run effects of the budget deficit, the study employed the error correction model (ECM) and decisions were made based on a five percent level of significance. Focusing on the core explanatory variable which is budget deficit, the empirical results discovered a negative and significant relationship between budget deficit and economic growth both in the short and long run period, implying that high deficit deteriorates the growth rate of the economy. Moreover, the results show a direct but insignificant relationship between deficit and unemployment rate in short and long run period in Namibia. In addition, budget deficits show a negative but insignificant relationship towards real interest rate in both the short and long run period. As a result, the study resolved that the Neoclassical theory holds in Namibia. Consequently, in order to contain this adverse effect, the government should ensure that the exacerbated level of budget deficit is addressed.
- ItemINSTITUTIONS, FOREIGN DIRECT INVESTMENT AND DOMESTIC INVESTMENT IN SUB-SAHARAN AFRICA(University of Cape Coast, 2021-07-06) GALAH, JACOB KWADZO BRAVOThe study examines the effects of institutions and foreign direct investment on domestic investment in Sub-Saharan Africa (SSA) from 2006-2017. To achieve the objectives of the study, fixed and random effects estimation techniques were employed on annual panel data of 28 countries in Sub-Saharan Africa. Institutional variables (institutions) were found to have positive effects on domestic investment in SSA. Good institutions, therefore, contribute to increasing domestic investment in SSA. Again, the results indicate that an enhancement of government effectiveness in the presence of foreign direct investment, domestic private investment increases. The results also disclosed that institutions in general have positive effects on domestic private investment. The study, therefore, recommends that governments of SSA through their respective public and civil services should ensure the improvement of institutions in their respective countries to serve as a conduit for enhancing domestic investment in the subregion.
- ItemCRUDE OIL PRODUCTION AND MACROECONOMIC PERFORMANCE IN GHANA(University of Cape Coast, 2021-02-12) Tunyo, Delali AkuThis study investigated the impact of crude oil production on macroeconomic performance in Ghana. The study employed monthly data from January 2011 to December 2018. The structural vector autoregressive (SVAR) model was employed to analyse the impact of crude oil production on macroeconomic performance. The findings of the structural impulse response function revealed that crude oil production had no impact on the agricultural sector, manufacturing sector, services sector, real effective exchange rate and inflation. However, crude oil production had a positive impact on fiscal balance. The findings of the structural forecast error variance decomposition showed that crude oil production accounted for a small amount of variation in all the variables except fiscal balance for which it accounted for the largest portion of the variation. The study concluded that crude oil production had no significant impact on the non-oil sectors, real effective exchange rate and inflation. However, crude oil production had a positive impact on fiscal balance. The study recommended that the government through GNPC and major oil stakeholders such as Tullow Ghana Limited, Kosmos Energy Ghana and Anardako Petroleum Corporation should establish of oil refineries, petroleum industries and fertilizer plants domestically and also the development of the manufacturing and the services sector to provide the backward and forward linkages that needs to be shared between the oil sector and other sectors of the economy.
- ItemINFLATION AND ECONOMIC GROWTH IN SIERRA LEONE(UNIVERSITY OF CAPE COAST, 2011-08-03) SWARAY, SAIDUThe study examined the relationship between inflation and economic growth in Sierra Leone using annual data for the period 1979 to 2008. Employing autoregressive distributed lag (ARDL) approach to cointegration, the study found a cointegrating relationship among the variables when real GDP was used as the dependent variable and no cointegrating relationship among the variables when inflation was used as the dependent variable. The bounds test results revealed that inflation exerted a negative and statistically significant effect on economic growth both in the short-run and long-run suggesting that higher rates of inflation is inimical to economic growth in Sierra Leone. Also, investment as a share of GDP and government expenditure exerted a positive and statistically significant impact on economic growth both in the short-run and long-run suggesting that government expenditure and investment are critical in enhancing sustained economic growth and development. The Granger causality test result revealed a unidirectional causality between inflation and economic growth and ran from economic growth to inflation. Thus, the study concluded that government expenditure in the form of investment is an important channel through which the economy can achieve economic growth. Hence, the study recommended that government should embark on judicious investment especially in infrastructure to achieve sustained economic growth.
- ItemAN ANALYSIS OF MACROECONOMIC DETERMINANTS OF REMITTANCES IN SOUTHERN AFRICA(UNVERSITY OF NAMIBIA, 2020-09-29) SINGOGO, FWASA KThe study analyzed macroeconomic determinants of remittances in Southern Africa and made use of annual data for the period ranging from 2003 to 2016. The macroeconomic determinants used include: remittances themselves, the inflation rate, GDP growth rate, the nominal exchange rate, broad money and age dependency ratio. In doing so, the study further analyzed cyclicality and the volatility of remittances in the region in order to get a more rounded perspective. In seeking to meet its objectives, a panel study was carried out using both the fixed and random methods of which the random method was found to be most appropriate. The Southern African countries included in the study were Botswana, Lesotho, Malawi, Mozambique, South Africa, Swaziland and Zambia. Other major tests applied included a Standard deviation test for volatility; the Hodrick Prescott (HP) filter with detrended series, to analyze for cyclicality; and cross correlation tests to determine if there existed pro or counter cyclical behavior. The study found that amongst the macroeconomic determinants used; only GDP growth (changes/improvements in the home countries’ economic environment) and the exchange rate were statistically significant with respective positive relationships with remittance inflows. It was also found that volatility of remittances was low, which was evidently reflected in the values of the standard deviations with the highest being 1.784. In regards to cyclicality, the tests exhibited prominence of pro cyclical behavior which could imply that migrants optimize placement of their savings between origin and destination countries of which the remitting of funds is a form of investment. However, several periods of counter cyclicality were observed that made it hard to out-rightly conclude pro cyclicality as being the definite trend.