BazEkon - The Main Library of the Cracow University of Economics

BazEkon home page

Main menu

Author
Shobande Olatunji Abdul (University of Aberdeen, United Kingdom)
Title
Fiscal Rule in Africa
Source
Open Economics, 2020, vol. 3, iss. 1, s. 112-120, tab., bibliogr. 47 poz.
Keyword
Polityka fiskalna, Wzrost gospodarczy, Inwestycje, Analiza ekonometryczna
Fiscal policy, Economic growth, Investment, Econometric analysis
Note
summ.
Country
Afryka
Africa
Abstract
Fiscal policy has recently been encouraged to increase competition, monitor Africa's debt to GDP and improve its economic growth. Importantly, the present fiscal situation in most African countries will seem to have significant consequences for both public and private investments. This paper examines whether fiscal policy and investment matters for GDP growth in a panel of forty-eight (48) African countries for the period 1970-2017. The empirical evidence explored is based on the Fixed Effect (FE) and System Generalised Method of Moment (GMM) estimators. The results suggest that public and private investment among selected African countries has a positive impact on GDP growth. The findings further indicate that fiscal policies must play a more prominent role in sustaining potential private and public investments, especially as debt servicing among the African' countries examined may have serious shortcomings on sustainable economic growth. (original abstract)
Full text
Show
Bibliography
Show
  1. Adefeso, H. A. (2018). Government Tax Policy and Performance of Listed Manufacturing Firms in Nigeria: Evidence from Dynamic Panel Data Model. Zagreb International Review of Economics and Business, 21(1), 1-16. https://doi.org/10.2478/zireb-2018-0001
  2. Afonso, A., & Jalles, J. T. (2017). Fiscal Episodes and Market Power. Open Economies Review, 28(2), 233-250. https://doi.org/10.1007/s11079-016-9419-7
  3. Alesina, A., & Passalacqua, A. (2016). The Political Economy of Government Debt. Handbook of Macroeconomics, 2, 2599-2651. https://doi.org/10.1016/bs.hesmac.2016.03.014
  4. Alesina, A., Azzalini, G., Favero, C., Giavazzi, F., & Miano, A. (2018). Is it the "how" or the "when" that Matters in Fiscal Adjustments? IMF Economic Review, 66(1), 144-188. https://doi.org/10.1057/s41308-017-0047-z
  5. Areliano, M., & Bover, O. (1995). Another look at the instrumental variable estimation of error-components models. Journal of Econometrics, 68(August 1990), 29-51.
  6. Arellano, M., & Bond, S. (1991). Some Tests of Specification for Panel Carlo Application to Data: Review of Economic Studies, 58, 277-297.
  7. Arrow, K. J., & Kurz, M. (1970). Optimal Growth with Irreversible Investment in a Ramsey Model. International Bibliography of the Social Sciences (IBSS), 38(2), 331. https://doi.org/10.2307/1913014
  8. Ashihara, A., & Kameda, K. (2018). Is fiscal expansion more effective in a financial crisis? Applied Economics Letters, 25(2), 111-114. https://doi.org/10.1080/13504851.2017.1299098
  9. Asongu, S. A., Le Roux, S., & Biekpe, N. (2017). Environmental degradation, ICT and inclusive development in Sub-Saharan Africa. Energy Policy, 111(October), 353-361. https://doi.org/10.1016/j.enpol.2017.09.049
  10. Baltagi, B. H. (2008). Forecasting with Panel Data. Journal of Forecasting, 173(January), 153-173.
  11. Baltagi, B. H., Egger, P. H., & Kesina, M. (2018). Generalised spatial autocorrelation in a panel-probit model with an application to exporting in China. Empirical Economics, 55(1), 193-211. https://doi.org/10.1007/s00181-017-1409-0
  12. Barro, R. J. (1990). Government Spending in a Monetary Model of Endogenous Growth. Rivista Internazionale Di Scienze Sociali, 112(3), 106-122. https://doi.org/10.1400/23776
  13. Bishnu, M., Ghate, C., & Gopalakrishnan, P. (2016). Factor income taxation, growth, and investment specific technological change. Economic Modelling, 57, 133-152. https://doi.org/10.1016/j.econmod.2016.04.007
  14. Boubaker, S., Nguyen, D. K., & Paltalidis, N. (2018). Fiscal policy interventions at the zero lower bound. Journal of Economic Dynamics and Control, 93, 297-314. https://doi.org/10.1016/j.jedc.2018.01.048
  15. Burkhead, J. (1954). The Balanced Budget. The Quarterly Journal of Economics, 68(2), 191-216.
  16. Chen, C., Yao, S., Hu, P., & Lin, Y. (2017). Optimal government investment and public debt in an economic growth model. China Economic Review, 45, 257-278. https://doi.org/10.1016/j.chieco.2016.08.005
  17. Diniz, A. (2018). Effects of Fiscal Consolidations in Latin America. IMF Economic Review, 66(4), 694-731. https://doi.org/10.1057/s41308-018-0069-1
  18. Eller, M., Fidrmuc, J., & Fungáčová, Z. (2016). Fiscal Policy and Regional Output Volatility: Evidence from Russia. Regional Studies, 50(11), 1849-1862. https://doi.org/10.1080/00343404.2015.1064884
  19. Förster, B., & Hayo, B. (2018). Monetary and Fiscal Policy in Times of Crisis: A New Keynesian Perspective in Continuous Time. Manchester School, 86(1), 21-48. https://doi.org/10.1111/manc.12173
  20. Futagami, K., Morita, Y., & Shibata, A. (1993). Dynamic Analysis of an Endogenous Growth Model with Public Capital. The Scandinavian Journal of Economics, 95(4), 607-625.
  21. Glomm, G., & Ravikumar, B. (2016). Public versus Private Investment in Human Capital : Endogenous Growth and Income Inequality Author (s): Gerhard Glomm and B . Ravikumar Source : Journal of Political Economy , Vol . 100 , No . 4 (Aug ., 1992), pp . 818-834 Published by : The Universit, 100(4), 818-834.
  22. Gobbi, A., & Grazzini, J. (2019). A basic New Keynesian DSGE model with dispersed information: An agent-based approach. Journal of Economic Behavior and Organization, 157, 101-116. https://doi.org/10.1016/j.jebo.2017.12.015
  23. Greiner, A., & Flaschel, P. (2010). Public debt and public investment in an endogenous growth model with real wage rigidities. Scottish Journal of Political Economy, 57(1), 68-84. https://doi.org/10.1111/j.1467-9485.2009.00507.x
  24. Hartley, P. M., & Rogers, L. C. G. (2006). Two-Sector Stochastic Growth Models. Australian Economics Papers, (June 2003). https://doi.org/10.1111/j.1467-8454.2005.00272.x
  25. Hayakawa, K. (2014). The asymptotic properties of the system GMM estimator in dynamic panel data models when both N and T are large. Econometric Theory, 31(3), 647-667. https://doi.org/10.1017/S0266466614000449
  26. Hur, J., & Rhee, W. (2019). Multipliers of expected vs. unexpected fiscal shocks: The case of Korea. Economic Modelling, (May). https://doi.org/10.1016/j.econmod.2019.05.021
  27. Islam, M. R., Madsen, J. B., & Doucouliagos, H. (2018). Does inequality constrain the power to tax? Evidence from the OECD. European Journal of Political Economy, 52(June 2016), 1-17. https://doi.org/10.1016/j.ejpoleco.2017.02.006
  28. Iwata, Y. (2009). Fiscal Policy in an Estimated DSGE Model of the Japanese Economy: Do Non-Ricardian Households Explain All? Social ESRI Discussion PaperResearch, (216), 2-33. Retrieved from http://www.esri.go.jp/jp/archive/e_dis/e_dis220/e_dis216a.pdf
  29. Iwata, Y. (2013). Two fiscal policy puzzles revisited : New evidence and an explanation. Journal of International Money and Finance, 33, 188-207. https://doi.org/10.1016/j.jimonfin.2012.11.015
  30. Kara, E., & Sin, J. (2018). The Fiscal Multiplier in a Liquidity-Constrained New Keynesian Economy. Scandinavian Journal of Economics, 120(1), 93-123. https://doi.org/10.1111/sjoe.12208
  31. Kataryniuk, I., & Vallés, J. (2018). Fiscal consolidation after the Great Recession: The role of composition. Oxford Economic Papers, 70(2), 563-585. https://doi.org/10.1093/oep/gpx032
  32. Kendrick, D., & Amman, H. M. (2011). Toward a Taylor rule for fiscal policy. Review of Economic Dynamics, 17(2), 294-302. https://doi.org/10.1016/j.red.2013.08.003
  33. Lai, C. C., & Liao, C. H. (2012). Optimal nonlinear income taxation with productive government expenditure. International Review of Economics and Finance, 22(1), 66-77. https://doi.org/10.1016/j.iref.2011.08.009
  34. Love, I., & Zicchino, L. (2006). Financial development and dynamic investment behavior: Evidence from panel VAR. Quarterly Review of Economics and Finance, 46(2), 190-210. https://doi.org/10.1016/j.qref.2005.11.007
  35. Lucas, R. E. (1988). On the mechanics of economic development. Journal of Monetary Economics, 22(February), 3-42. Retrieved from papers3://publication/uuid/E9153238-F921-4735-8B9E-A2486ED1A1E5
  36. Minea, A., & Villieu, P. (2010). Endogenous growth, government debt and budgetary regimes: A Corrigendum (DOI:10.1016/S0164-0704(00)00136-1). Journal of Macroeconomics, 32(2), 709-711. https://doi.org/10.1016/j.jmacro.2009.11.003
  37. Prota, F., & Grisorio, M. J. (2018). Public expenditure in time of crisis: are Italian policymakers choosing the right mix? Economia Politica, 35(2), 337-365. https://doi.org/10.1007/s40888-018-0124-4
  38. Ramey, V. A., & Zubairy, S. (2018a). Government Spending Multipliers in Good Times and in Bad : Evidence from US Historical Data Sarah Zubairy. Journal of Political Economy, 126(2), 850-897.
  39. Ramey, V. A., & Zubairy, S. (2018b). Government Spending Multipliers in Good Times and in Bad: Evidence from US Historical Data. Journal of Political Economy, 126(2), 850-901. https://doi.org/10.1086/696277
  40. Reicher, C. P. (2012). An estimated fiscal Taylor Rule for the postwar United States. Economics Letters, 114(3), 319-321. https://doi.org/10.1016/j.econlet.2011.10.020
  41. Romer, P. M. (1986). Increasing returns and long-run growth. Journal of Political Economy, 94(5), 1002-1038. https://doi.org/10.1086/261420
  42. Roodman, D. (2009a). A Note on the Theme of Too Many Instruments Å. Oxford Bulletin of Economics and Statistics, 71(1), 135-158. https://doi.org/10.1111/j.1468-0084.2008.00542.x
  43. Roodman, D. (2009b). How to do xtabond2 : An introduction to difference and system GMM in Stata. The Stata Journal, 9(1), 86-136.
  44. Snell, A., Stüber, H., & Thomas, J. P. (2018). Review of Economic Dynamics Downward real wage rigidity and equal treatment wage contracts : Theory and evidence. Review of Economic Dynamics, 30, 265-284. https://doi.org/10.1016/j.red.2018.06.001
  45. Sriyana, J. (2018). Inflationary effects of fiscal and monetary policies in Indonesia. Business and Economic Horizons, 14(3), 674-688. https://doi.org/10.15208/beh.2018.47
  46. Ueshina, M. (2018). The effect of public debt on growth and welfare under the golden rule of public finance. Journal of Macroeconomics, 55, 1-11. https://doi.org/10.1016/j.jmacro.2017.08.004
  47. Zubairy, S. (2009). On Fiscal Multipliers : Estimates from a Medium Scale DSGE. Canadian Economic Analysis Department , Bank of Canada Working Paper / Document de Travail 20101-30, 1-48.
Cited by
Show
ISSN
2451-3458
Language
eng
URI / DOI
http://dx.doi.org/10.1515/openec-2020-0107
Share on Facebook Share on Twitter Share on Google+ Share on Pinterest Share on LinkedIn Wyślij znajomemu