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Drivers of Growth: Evidence from Sub-Saharan African Countries

Manuk Ghazanchyan () and Janet Gale Stotsky

No 13/236, IMF Working Papers from International Monetary Fund

Abstract: This study examines the drivers of growth in Sub-Saharan African countries, using aggregate data, from the past decade. We correlate recent growth experience to key determinants of growth, including private and public investment, government consumption, the exchange regime and real exchange rate, and current account liberalization, using various econometric methodologies, including fixed and random effects models, with cluster-robust standard errors. We find that, depending on the specification, higher private and public investments boost growth. Some evidence is found that government consumption exerts a drag on growth and that more flexible exchange regimes are beneficial to growth. The real exchange rate and liberalization variables are not significant.

Keywords: Economic growth; Sub-Saharan Africa; Private investment; Public investment; Foreign exchange; Exchange rate regimes; Real effective exchange rates; real exchange rate, exchange restrictions, exchange rate regime classifications, overvalued exchange rates, exchange arrangements, flexible exchange rate, real exchange rates, nominal exchange rate, current accounts, foreign exchange market, exchange rate stability, history of exchange rate, exchange rate volatility, exchange rate arrangements, flexible exchange rate regimes, hard currency, floating exchange rates, exchange rate information, fixed exchange rates, de facto exchange rate regime, exchange rate appreciation, exchange rate regime durability, nominal exchange rates (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fdg and nep-mac
Date: 2013-11-22
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