Sources of economic growth in Zambia: an empirical investigation

Themba Chirwa and Nicholas Odhiambo

No 20067, Working Papers from University of South Africa, Department of Economics

Abstract: In this paper, the key macroeconomic determinants of economic growth in Zambia are investigated using the recently developed ARDL bounds-testing approach. The study has been motivated by the unsustainable growth trends that Zambia has been experiencing in recent years. Our study finds that the key macroeconomic determinants that are significantly associated with economic growth in Zambia include, amongst others, investment, human capital development, government consumption, international trade and foreign aid. The study?s results reveal that in the short run, investment and human capital development are positively associated with economic growth, while government consumption, international trade and foreign aid are negatively associated with economic growth. However, in the long run, the study finds investment and human capital development to be positively associated with economic growth, while only foreign aid is negatively associated with economic growth. These results have significant policy implications. They imply that short-run economic policies should focus on creating incentives that attract investment and increase the quality of education, the effectiveness of government institutions, the promotion of international trade and the effectiveness of development aid. In the long run, development strategies should focus on attracting the accumulation of long-term investment, improving the quality of education and the effectiveness of development aid.

Keywords: Zambia; Autoregressive Distributed Lag Models; Economic Growth (search for similar items in EconPapers)
Date: 2016-04
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Sources of Economic Growth in Zambia: An Empirical Investigation (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:uza:wpaper:20067

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