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Fiscal Policy, Monetary Policy and Economic Growth in Sub-Saharan Africa

Ubi-Abai, Itoro and Ekere, Daniel (2018): Fiscal Policy, Monetary Policy and Economic Growth in Sub-Saharan Africa.

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Abstract

The study analysed the effects of fiscal and monetary policies on economic growth in a panel of 47 sub-Saharan African economies from 1996 to 2016, using descriptive analysis, the econometric techniques of dynamic panel General Method of Moment and the Dumitrescu- Hurlin causality; the scaling quantity analysis inclusive. The study traced the debate from the Keynesians to the Monetarist. The findings showed that fiscal and monetary policies affected economic growth positively in the sub-region. Moreover, fiscal policy has a greater scale- effect in enhancing economic growth in sub-Saharan Africa. The study concluded that fiscal policy had greater influence on growth than monetary policy. It was recommended, amongst others, that governments of countries in the sub-Saharan region should focus more on formulating and implementing programmes that support productive investments; foster favourable trade; improve productivity of labour; and make the political environment stable.

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