Optimal public investment, growth, and consumption : evidence from African countries

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dc.contributor.author Fosu, Augustin Kwasi
dc.contributor.author Getachew, Yoseph
dc.contributor.author Ziesemer, Thomas H.W.
dc.date.accessioned 2016-02-17T09:17:23Z
dc.date.issued 2016-12
dc.description.abstract This paper develops a model positing a nonlinear relationship between public investment and growth. The model is then applied to a panel of African countries, using nonlinear estimating procedures. The growth-maximizing level of public investment is estimated at about 10% of GDP, based on System GMM estimation. The paper further runs simulations, obtaining the constant optimal public investment share that maximizes the sum of discounted consumption as between 8.1% and 9.6% of GDP. Compared with the observed end-of-panel mean value of no more than 7.26%, these estimates suggest that there has been significant public underinvestment in Africa. en_ZA
dc.description.embargo 2016-07-30
dc.description.librarian hb2015 en_ZA
dc.description.uri http://journals.cambridge.org/ en_ZA
dc.identifier.citation Fosu, AK, Getachew, Y & Ziesemer, THW 2016, 'Optimal public investment, growth, and consumption : evidence from African countries', Macroeconomic Dynamics, vol. 20, no. 8, pp. 1957-1986. en_ZA
dc.identifier.issn 1365-1005 (print)
dc.identifier.issn 1469-8056 (online)
dc.identifier.other 10.1017/S1365100515000206
dc.identifier.uri http://hdl.handle.net/2263/51421
dc.language.iso en en_ZA
dc.publisher Cambridge University Press en_ZA
dc.rights © 2015 Cambridge University Press en_ZA
dc.subject Public investment en_ZA
dc.subject Economic growth en_ZA
dc.subject Nonlinearity en_ZA
dc.title Optimal public investment, growth, and consumption : evidence from African countries en_ZA
dc.type Postprint Article en_ZA


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