Disaggregated government expenditure and economic growth in Ghana
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Date
2019-06
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Publisher
Ghana Social Science Journal
Abstract
The study examined the growth impact of government consumption,
interest and transfer payments in Ghana. Using a quarterly time series data
from 1984 to 2015 with maximum likelihood estimation (MLE), the
results revealed that government interest payments and consumption
expenditure negatively impact economic growth in both long run and short
run. However, government transfers indicated a positive significant
impact on growth of output. The results further revealed a bi-directional
causality between government interest payment and economic growth
while unidirectional causalities running from government consumption
expenditure and transfer payment to economic growth were also
established. The study recommends that the Ministry of Finance should
take measures to check the share and growth of interest payments and
consumption expenditure in government total expenditure; and
government through the Livelihood Empowerment Against Poverty
(LEAP) programme should increase and regularize its transfer payments
in order to elevate the vulnerable groups from extreme poverty and
stimulate aggregate demand and output.
Description
Ghana Social Science Journal, 16(1), 157
Keywords
Consumption expenditure, transfer payment, interest payment, Economic growth