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The influence of government expenditure on economic growth in Ghana: An Ardl approach

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  • Kwasi Poku
  • Emmanuel Opoku
  • Priscilla Agyeiwaa Ennin

Abstract

The relationship between public sector expenditure and economic growth for several decades past is still relevant today and continues to be a topic of debate among policy-makers and researchers. We examine the impact of government expenditure on economic growth in Ghana using data from 1970 to 2016, employing ARDL econometric estimation technique. The empirical findings indicate that, government expenditure has a positive relationship with economic growth in the short-run. The results further show that, Gross Capital Formation and Foreign Direct Investment show a significant positive relationship with economic growth in both the short-run and long-run. However, population growth reveals a significant negative relationship with economic growth (GDP Growth). We recommend government to increase public expenditure on profitable projects since it promotes economic growth.

Suggested Citation

  • Kwasi Poku & Emmanuel Opoku & Priscilla Agyeiwaa Ennin, 2022. "The influence of government expenditure on economic growth in Ghana: An Ardl approach," Cogent Economics & Finance, Taylor & Francis Journals, vol. 10(1), pages 2160036-216, December.
    • Handle: RePEc:taf:oaefxx:v:10:y:2022:i:1:p:2160036
    DOI: 10.1080/23322039.2022.2160036
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