SUBSTITUTABILITY BETWEEN GOVERNMENT AND PRIVATE CONSUMPTION IN SUB-SAHARAN AFRICA

Grace Nkansa Asante, Gideon Amankwah, Godwill Nyarkoh () and Samuel Baidoo
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Grace Nkansa Asante: Department of Economics, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana
Gideon Amankwah: Department of Economics, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana

Global Economy Journal (GEJ), 2021, vol. 21, issue 03, 1-21

Abstract: The question of whether private and public consumption are complements or substitutes has been an issue of concern and hence, attracted the attention of researchers and policy think tanks. This study therefore investigates this important phenomenon within the context of sub-Saharan Africa (SSA) to inform the design of fiscal policy measures. Using panel data spanning the period 1981–2016 for 21 sub-Saharan African countries, the results indicate that, government and private consumption are substitutes. This indicates that government spending crowds out private consumption in the sub region. Vital policy implications have been provided for consideration based on the findings.

Keywords: Government consumption; private consumption; substitutability; fiscal policy; Edgeworth–Pareto (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1142/S2194565921500123

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