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The balance of payments constrained growth model with sustainable debt accumulation, interest payments and the terms of trade: evidence from Sub-Saharan Africa

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  • Sumra, Shanaz

Abstract

The relevance of a demand-led growth model for long run economic growth is tested for the sub-Saharan African region using an augmented balance of payments constrained growth model which allows for sustainable debt accumulation, interest rate payments and the terms of trade movements. An autoregressive distributive lag (ARDL) model is used to estimate the model for 22 sub-Saharan African economies. Different specifications of the balance of payments constrained growth model are estimated and compared. The results indicate that the region was balance of payments constrained between the 1960 to 2014 period. In addition, the model which allows for sustainable debt accumulation and interest rate payments abroad best explained the growth experience of the region.

Suggested Citation

  • Sumra, Shanaz, 2016. "The balance of payments constrained growth model with sustainable debt accumulation, interest payments and the terms of trade: evidence from Sub-Saharan Africa," Greenwich Papers in Political Economy 14664, University of Greenwich, Greenwich Political Economy Research Centre.
    • Handle: RePEc:gpe:wpaper:14664
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    File URL: http://gala.gre.ac.uk/id/eprint/14664/1/GPERC36_Sumra.pdf
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    Cited by:

    1. Epaphra, Manamba & Amin, Jennifer, 2022. "The relationship between Trade Liberalization, Growth and Balance of Payments in Sub-Saharan Africa: Insights from Dynamic Panel Data Analysis," African Journal of Economic Review, African Journal of Economic Review, vol. 10(4), September.

    More about this item

    Keywords

    balance of payments; constrained growth; debt; interest payments abroad; terms of trade; sub-Saharan Africa;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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