How Robust Is the Link Between Growth and Fiscal Consolidations Amid Uncertainties? A Reassessment for Sub-Saharan Africa

Miaomiao Tao (), Jamel Saadaoui and Emilson Silva ()
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Miaomiao Tao: The University of Auckland
Emilson Silva: The University of Auckland

No 2025.7, Working Papers from International Network for Economic Research - INFER

Abstract: We revisit the relationship between fiscal tightening and economic growth within the Sub-Saharan African context, employing a local projection framework augmented with instruments. In contrast to the conclusions reached by Badru et al. (2025), our findings highlights that fiscal consolidation triggers the growth-depressing effect, independent of the estimation technique used. This contractionary impact intensifies under heightened global uncertainty – whether gauged through geopolitical tension metrics or economic policy unpredictability measures.

Keywords: Fiscal consolidation; economic growth; local projection; Sub-Saharan Africa (search for similar items in EconPapers)
JEL-codes: E H (search for similar items in EconPapers)
Pages: 18 pages
Date: 2025
New Economics Papers: this item is included in nep-afr
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