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The Determinants of Economic Growth in Ghana: New Empirical Evidence

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  • Ho, Sin-Yu
  • Njindan Iyke, Bernard

Abstract

This paper deals with an investigation into the determinants of economic growth in Ghana over the period 1975 to 2014. In particular, we investigated the impact of physical capital, human capital, labour, government expenditure, inflation, foreign aid, foreign direct investment, financial development, globalisation and debt servicing on economic performance within an augmented Solow growth model. It was found that, in the long run, both human capital and foreign aid have a positive influence on output, while labour, financial development and debt servicing have a negative impact on output. It was also found that, in the short run, government expenditure and foreign aid have a positive influence on economic growth, while labour, inflation and financial development have a negative impact on economic growth. These findings hold important policy implications for the country.

Suggested Citation

  • Ho, Sin-Yu & Njindan Iyke, Bernard, 2018. "The Determinants of Economic Growth in Ghana: New Empirical Evidence," MPRA Paper 87123, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:87123
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    Keywords

    Determinants; economic growth; Ghana; ARDL bounds testing.;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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