EconPapers    
Economics at your fingertips  
 

The nexus between key macroeconomic determinants and economic growth in Zambia: a dynamic multivariate Granger causality linkage

Themba Chirwa () and Nicholas Odhiambo ()

Empirical Economics, 2019, vol. 57, issue 1, No 12, 327 pages

Abstract: Abstract This study investigates the nexus between key macroeconomic determinants and economic growth in Zambia by employing the Autoregressive Distributed Lag model to test for Granger causality covering the period 1970–2015. The empirical results reveal that there are three distinct Granger causality hypotheses that exist in Zambia related to economic growth. The dominant hypothesis is the feedback hypothesis between investment, population growth, foreign aid and economic growth both in the short- and long-run; between real exchange rate, trade openness and economic growth in the short-run; and between government consumption, inflation and economic growth in the long-run. The second is the supply-leading hypothesis that runs from government consumption, and inflation to economic growth in the short-run; and from real exchange rate, and trade openness to economic growth in the long-run. Lastly, the neutrality hypothesis holds between human capital and economic growth in the short-run. These results have significant policy implications for the Zambian economy. They imply that the authorities should focus on promoting economic incentives that encourage the growth of real GDP per capita and investment, improve the quality of human capital, trade reforms, population control, macroeconomic stability, and the effectiveness of foreign aid.

Keywords: Zambia; Autoregressive Distributed Lag models; Cointegration; Granger causality; Economic growth (search for similar items in EconPapers)
JEL-codes: C22 O47 O55 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s00181-018-1439-2 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: The nexus between key macroeconomic determinants and economic growth in Zambia: A dynamic multivariate granger-causality linkage (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:empeco:v:57:y:2019:i:1:d:10.1007_s00181-018-1439-2

Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2

DOI: 10.1007/s00181-018-1439-2

Access Statistics for this article

Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2020-10-10
Handle: RePEc:spr:empeco:v:57:y:2019:i:1:d:10.1007_s00181-018-1439-2