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A Co-Integration Analysis of Growth in Government Expenditure in Ghana

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  • Grace Ofori-Abebrese

    ()
    (Kwame Nkrumah University of Science and Technology)

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    Abstract

    Growth in government consumption expenditure in Ghana has been a concern to policy makers since independence. This paper uses the co-integration technique to determine how inflation, real GDP, trade openness, population growth and relative price influence government consumption expenditure. The study revealed that increases in real GDP, trade openness and inflation cause a fall in government consumption expenditure as a share of GDP. Higher relative price levels and larger population size increase government consumption expenditure for the period 1977-2007. The study recommend measures to curb population growth, reduce the price of public goods, manage the over liberalization of the economy, among others.

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    Bibliographic Info

    Article provided by African Finance and Economic Association in its journal Journal of African Development.

    Volume (Year): 14 (2012)
    Issue (Month): 1 ()
    Pages: 47-61

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    Handle: RePEc:afe:journl:v:14:y:2011:i:1:p:47-61

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    Web page: http://afea.info/journal-of-african-development.html
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    Keywords: government; consumption; Ghana; GDP; co-integration; trade liberalization;

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