scholarly journals ECONOMIC GROWTH AND INCOME INEQUALITY IN SUB-SAHARAN AFRICA

2020 ◽  
Vol 14 (1) ◽  
pp. 113-129
Author(s):  
S. O. AKINBODE ◽  
T. M. BOLARINWA ◽  
O. O. HASSAN
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Granger Causality ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Causality Test ◽  
Distributed Lag ◽  
Long Run ◽  
Negative Effect ◽  
Sub Saharan

Economies of Sub-Saharan African (SSA) countries have been growing slowly in recent time. Economic growth is thought to affect inequality but not much is known about the nature of such relationship in SSA and there is no concordance among the few available. This paper examined the relationship between economic growth and inequality in the region using data from 1990 to 2017estimated with the Panel Autoregressive Distributed Lag (ARDL) Model and Granger Causality. Hausman’s test suggested the superiority of the Pooled Mean Group (PMG) over the Mean Group (MG) Model. The PMG results showed that economic growth had significant and negative effect on income inequality (proxy by GINI-coefficient) in the long run suggesting a state of the later part of the Kuznet curve. This is in addition to the negative effect in the short run which is contrary to the theory. Furthermore, the result of the Granger Causality test revealed evidence of unidirectional relationship running from economic growth to income inequality in the region. Therefore, the study recommended that governments of Sub-Saharan African countries should implement policies and programmes capable of sustaining and improving inclusive growth in order to avoid high income inequality in the region.      

scholarly journals Financial Inclusion, Income Inequality and Sustainable Economic Growth in Sub-Saharan African Countries

2021 ◽  
Vol 13 (4) ◽  
pp. 1780
Author(s):  
Chima M. Menyelim ◽  
Abiola A. Babajide ◽  
Alexander E. Omankhanlen ◽  
Benjamin I. Ehikioya
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Financial Services ◽  
Sub Saharan Africa ◽  
Kuznets Curve ◽  
African Countries ◽  
Financial Access ◽  
Sub Saharan ◽  
Sustainable Economic Growth ◽  
The Impact

This study evaluates the relevance of inclusive financial access in moderating the effect of income inequality on economic growth in 48 countries in Sub-Saharan Africa (SSA) for the period 1995 to 2017. The findings using the Generalised Method of Moments (sys-GMM) technique show that inclusive financial access contributes to reducing inequality in the short run, contrary to the Kuznets curve. The result reveals a negative effect of financial access on the relationship between income inequality and economic growth. There is a positive net effect of inclusive financial access in moderating the impact of income inequality on economic growth. Given the need to achieve the Sustainable Development Targets in the sub-region, policymakers and other stakeholders of the economy must design policies and programmes that would enhance access to financial services as an essential mechanism to reduce income disparity and enhance sustainable economic growth.

The relationship between financial development and economic growth in Eswatini (formerly Swaziland)

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Siphe-okuhle Fakudze ◽  
Asrat Tsegaye ◽  
Kin Sibanda
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Financial Development ◽  
Granger Causality Test ◽  
Causality Test ◽  
Content Type ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
The Relationship

PurposeThe paper examined the relationship between financial development and economic growth for the period 1996 to 2018 in Eswatini.Design/methodology/approachThe Autoregressive Distributed Lag bounds test (ARDL) was employed to determine the long-run and short-run dynamics of the link between the variables of interest. The Granger causality test was also performed to establish the direction of causality between financial development and economic growth.FindingsThe ARDL results revealed that there is a long-run relationship between financial development and economic growth. The Granger causality test revealed bidirectional causality between money supply and economic growth, and unidirectional causality running from economic growth to financial development. The results highlight that economic growth exerts a positive and significant influence on financial development, validating the demand following hypothesis in Eswatini.Practical implicationsPolicymakers should formulate policies that aims to engineer more economic growth. The policies should strike a balance between deploying funds necessary to stimulate investment and enhancing productivity in order to enliven economic growth in Eswatini.Originality/valueThe study investigates the finance-growth linkage using time series analysis. It determines the long-run and short-run dynamics of this relationship and examines the Granger causality outcomes.

scholarly journals HIV/AIDS and Economic Growth: Empirical Evidence from Sub-Saharan Africa

2015 ◽  
Vol 7 (4) ◽  
pp. 30 ◽  
Author(s):  
Danjuma Maijama'a ◽  
Shamzaeffa Samsudin ◽  
Shazida jan Mohd Khan
Keyword(s):  
Economic Growth ◽  
Time Lag ◽  
Hiv And Aids ◽  
Sub Saharan Africa ◽  
Growth Equation ◽  
Solow Model ◽  
African Countries ◽  
Negative Effect ◽  
Per Capita ◽  
Sub Saharan

<p>This study investigates the effects of the HIV and AIDS epidemic on economic growth in 42<br />sub-Saharan African countries using data spanning from 1990-2013. Unlike previous studies,<br />we use a longer data horizon and take the time lag effect of the epidemic’s incubation period<br />that is, after it might have developed to AIDS into consideration in our estimations. We<br />estimated an empirical growth equation within an augmented Solow model and applied the<br />dynamic system GMM estimator. The results suggest that current HIV prevalence rate –<br />associated with rising morbidity, has a negative effect on GDP per capita growth, conversely<br />AIDS – associated with higher mortality in addition to morbidity, increases per capita GDP<br />growth.</p>

scholarly journals Deconstructing the Impact of Entrepreneurship on Income Inequality in Sub-Saharan Africa Countries

2020 ◽  
Vol 34 (1) ◽  
pp. 273-284
Author(s):  
Jimoh S. Ogede
Keyword(s):  
Income Inequality ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Macroeconomic Factors ◽  
Significance Level ◽  
Long Run ◽  
Short Run ◽  
Sub Saharan ◽  
Entrepreneurial Activities ◽  
The Impact

Abstract The study examines the impacts of entrepreneurship on income inequality in a panel of 29 Sub-Saharan African countries spanning from 2004 to 2020. The paper employs a dynamic heterogeneous panel approach to differentiate between long-run and short-run impacts of entrepreneurship on income inequality. The findings establish a robust and direct nexus between entrepreneurial activities and income disparity. The results of the two entrepreneurial indicators are stable. Besides, the coefficient of the human capital is positive in the regression and statistically significant at a 5 percent significance level. The proxies for macroeconomic factors exhibit diverse signs and impact, which suggest a policy stimulus aimed at refining macroeconomic situations and also ignite prospects for households to increase their incomes.

scholarly journals Financial development and economic growth: literature survey and empirical evidence from sub-Saharan African countries

2011 ◽  
Vol 12 (1) ◽  
pp. 11-27 ◽  
Author(s):  
Songul Kakilli Acaravci ◽  
Ilhan Ozturk ◽  
Ali Acaravci
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Banking Sector ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Real Gdp ◽  
Long Run ◽  
Domestic Credit ◽  
Real Gdp Per Capita ◽  
Sub Saharan

In this paper we review the literature on the finance-growth nexus and investigate the causality between financial development and economic growth in Sub-Saharan Africa for the period 1975-2005. Using panel co-integration and panel GMM estimation for causality, the results of the panel co-integration analysis provide evidence of no long-run relationship between financial development and economic growth. The empirical findings in the paper show a bi-directional causal relationship between the growth of real GDP per capita and the domestic credit provided by the banking sector for the panels of 24 Sub-Saharan African countries. The findings imply that African countries can accelerate their economic growth by improving their financial systems and vice versa.

scholarly journals Growth effect of income inequality in sub-Saharan Africa: exploring the transmission channels

2020 ◽  
Vol 56 (2) ◽  
pp. 176-190
Author(s):  
Ibrahim Abidemi Odusanya ◽  
Anthony Enisan Akinlo
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Generalized Method Of Moments ◽  
Sub Saharan Africa ◽  
Growth Effect ◽  
Credit Market Imperfection ◽  
Negative Effect ◽  
Sub Saharan ◽  
Positive Effect ◽  
Ssa Countries

AbstractSub-Saharan Africa (SSA) ranks as the second most unequal region globally (in terms of income distribution), harboring 10 of the 19 most unequal countries in the world. This paper explores the channels through which income inequality exerts its effects on economic growth in SSA. The study spans the period 1995–2015, focusing on 31 SSA countries. Findings from the two-step system generalized method of moments suggest that income inequality exerts a significant positive effect on economic growth via the saving transmission channel, while it has a statistically significant negative effect on economic growth in the region through the channels of fertility, credit market imperfection, and fiscal policy.

scholarly journals Democracy and Growth Nexus in Indonesia

2020 ◽  
Vol 20 (2) ◽  
pp. 208-221
Author(s):  
Azwar Iskandar ◽  
Achmat Subekan
Keyword(s):  
Economic Growth ◽  
Least Squares ◽  
Granger Causality ◽  
Control Variable ◽  
Political Stability ◽  
Ordinary Least Squares ◽  
Causality Test ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run

The objective of this study is to analyze the causality between democracy and economic growth in Indonesia for the period of 1995 to 2017. More specifically, this paper  also attends to investigate the existence of a long-run relationship between them. This study perform a multivariate cointegration test with political stability as a control variable and cross-check this long-run relationship with an autoregressive distributed lag (ARDL) model approach to cointegration. This study also use the Granger causality test within a vector error correction model (VECM) framework and estimate three different models using a non-linear specification: Ordinary Least Squares (OLS) estimation, Fully Modified OLS (FM-OLS) and Dynamic Ordinary Least Squares (DOLS). The results show cointegration among the variables specified in the model when political stability is taken into account. Indeed, for economic growth and democracy to move together in the long run, they need to be associated with political stability. The tests for Granger causality conducted show a long-run causality running from GDP and political stability to democracy. In other word, the economic growth and political stability Granger cause democracy. It is the economic performance that influences democracy and not the reverse. In short-run, there is neutrality causation between democracy and growth, democracy and political stability, growth and political stability. These results suggest that economic growth through strong institutions is a precondition for democratization.

scholarly journals Government Spending and Economic Growth in Ghana: Evidence from Granger Causality Analysis

2017 ◽  
Vol 3 (2) ◽  
pp. 50-58 ◽  
Author(s):  
Lucy Anning ◽  
Wang Haisu ◽  
Joshua Sunday Riti
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Government Spending ◽  
Causality Analysis ◽  
Economic Activities ◽  
Bounds Testing ◽  
Causality Test ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run

In spite of the diverse major issues affecting the economy of Ghana over the years, the economy continues to experience a downward spiral in its economic growth. Taking into account three opining views regarding government spending and economic growth, this study sets to investigate the causal nexus fractious and economic growth in Ghana. We apply the autoregressive distributed lag (ARDL) bounds testing approach to co-integration and the vector error correction model (VECM)-Granger causality test to evaluate both long- and short-run parameters including the direction of causation with data spanning from 1980 and 2015.The empirical results show evidence of co-integration for the existence of a long-run relationship between the dependent and independent variables. The Granger causality tests, in addition, indicated causal independence between government spending and economic growth within the time framework of the study in the economy of Ghana. Government spending has a cause effect on economic growth in Ghana. However, government spending channeled into a more fractious use with the building of resilience and infrastructural development that are self-liquidating if encouraged will enhance economic activities in the short run and also propel growth in the long run in the Ghana.

scholarly journals Effect of Financial Inclusion on Income Inequality in Sub-Saharan Africa

2020 ◽  
pp. 1-15
Author(s):  
Kipoh Mpele Esther
Keyword(s):  
Income Inequality ◽  
Low Income ◽  
Low Cost ◽  
Panel Study ◽  
Generalized Method Of Moments ◽  
Financial Inclusion ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Negative Effect ◽  
Sub Saharan

Aims: To analyze financial inclusion as a channel to alleviate inequality in order to provide insight into the edifice of inequality reduction. Study Design:  Dynamic panel study. Place and Duration of Study: Sub-Saharan African countries over the period 2004-2018. Methodology: Using the generalized method of moments (GMM) on a sample of 27 Sub-Saharan African countries. Results: The results show that the estimated financial inclusion index has a negative effect on income inequality. Therefore, the depth of commercial bank branches and the effective use of bank accounts reduce income inequality. Conclusion: Increase financial inclusion as well as the development of financial infrastructure and the provision of specific low-cost services tailored to low-income households.

Testing tourism-led growth hypothesis in Laos?

2018 ◽  
Vol 73 (2) ◽  
pp. 242-251 ◽  
Author(s):  
Phouphet Kyophilavong ◽  
John Luke Gallup ◽  
Teerawat Charoenrat ◽  
Kenji Nozaki
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Tourism Development ◽  
Causality Test ◽  
Content Type ◽  
Distributed Lag ◽  
Long Run ◽  
Causality Tests ◽  
Econometric Approach ◽  
Growth Hypothesis

Purpose The purpose of this paper is to investigate the tourism-led growth hypothesis in Laos. Design/methodology/approach The authors test the tourism-led growth hypothesis using autoregressive distributed lag (ARDL) cointegration estimation (Pesaran et al., 2001) and Granger causality tests. Findings The results of this paper show that when tourism is forcing variable, there is no long-run relationship between tourism development and economic growth. The Granger causality test demonstrates that there is a uni-directional causality running from economic growth in tourism. Social implications The empirical results and policy recommendation may be useful for other small developing countries. Originality/value This study is the first study to investigate the relationship between tourism development and growth in Laos, using a relatively new econometric approach – ARDL bound testing.

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