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Drivers of Growth: Evidence from Sub-Saharan African Countries

Manuk Ghazanchyan and Janet Stotsky

No 2013/236, 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: WP; regime; exchange rate regime; regime dummy; exchange rate; Sub-Saharan Africa; growth; exchange rate regimes; real exchange rate; government consumption; exchange regime variable; foreign exchange regime; exchange regime classification; Exchange rate arrangements; Private investment; Real effective exchange rates; Real exchange rates (search for similar items in EconPapers)
Pages: 38
Date: 2013-11-22
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Citations: View citations in EconPapers (9)

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Handle: RePEc:imf:imfwpa:2013/236