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Optimal Public Investment, Growth, and Consumption: Fresh Evidence from African Countries

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  • Augustin K. Fosu
  • Thomas H. W. Ziesemer
  • Yoseph Y. Getachew

Abstract

This paper develops a model positing a nonlinear relationship between public investment and growth. The model is then applied to a panel of African countries using nonlinear estimating procedures. The growth-maximizing level of public investment is estimated at about 10 percent of GDP based on System GMM estimation. The paper further runs simulations, obtaining the […]

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  • Augustin K. Fosu & Thomas H. W. Ziesemer & Yoseph Y. Getachew, 2014. "Optimal Public Investment, Growth, and Consumption: Fresh Evidence from African Countries," Working Papers 471, Economic Research Southern Africa.
    • Handle: RePEc:rza:wpaper:471
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    More about this item

    Keywords

    Africa; Government spending; Growth; Panel data; Quantitative Methods;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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