Economic growth is an increase in the capacity of an economy to produce goods and services, compared from one period of time to another. The economic growth of a country is possible if strengths and weaknesses of the economy are properly analyzed. Economic fluctuations and growth empirical findings for a panel of around 100 countries from 1960 to 1990 strongly support the general notion of conditional convergence. Economic analysis provides an insight into the essentials of an economy. Determinants of economic growth in africa springerlink. Determinants of economic growth in nigeria kazeem b. New growth theories stress the importance of investments, human and physical capital in the longrun economic growth. Determinants of economic growth panel data approach edwin dewan shajehan hussein working paper 0104 may 2001 economics department reserve bank of fiji suva fiji the views expressed herein are those of the authors and do not necessarily reflect those of the reserve bank of fiji. Research on economic growth has exploded in the past decade. Determinants of economic growth panel data approach. Sixty years later, in 2011, the developed world had only 19 percent of the global population and about 44 percent of global income. In 1950, an average person in a developing economy earned in constant. Volume 14 2015 determinants of sme growth 2 introduction the benefits that small and medium enterprises smes provide for economic growth have long been recognised and are well documented. Consequently, neg is mainly concerned with the loca.
The policies, which affect the level of growth and the investment efficiency determine the longrun economic growth. The study used the econometric model adapted from mateev and anastasov 2012with some modifications. A crosscountry empirical study abstract empirical findings for a panel of around 100 countries from 1960 to 1990 strongly support the general notion of conditional convergence. Economic development is the increase in the standard of living in a nations population with sustained growth from a simple, lowincome economy to a modern, highincome economy. Grouped into three parts, chapters examine the influence of financial sources and economic growth. The present analysis focuses on the reverse channel, that is, the impact of economic development on a countrys propensity to experience democracy. Determinants of economic growth, based on robert barros lionel robbins memorial lectures, delivered at the london school of economics in february 1996, summarizes this important. The effects of inflation on economic growth and on its. Causal relationships between foreign direct investment growth and economic growth is unidirectional, running from foreign direct investment to economic growth. In particular, we investigated the impact of physical capital, human. The rapid growth of the 1960s is typically contrasted with the slowdown of the 1970s and 1980s.
Certainly, since exports consist one of the main determinants of economic growth, an increase of exports contributes to an increase of economic growth. The reason for these variations is a central issue for economic policy, and crosscountry empirical work on this topic has been popular since the early 1990s. Barro growth rates vary enormously across countries over long periods of time. However, there are also some other indirect factors, which affect the causal relationship between exports and economic growth. The effects of inflation on economic growth and on its macroeconomic determinants. It reveals that in developing countries the key macroeconomic determinants of economic growth include foreign aid, foreign direct investment, fiscal policy, investment, trade, human capital development, demographics, monetary policy, natural resources, reforms and geographic, regional, political and financial factors. The paper conducts a qualitative narrative appraisal of the existing empirical literature on the key macroeconomic determinants of economic growth in developing and developed countries. Over the last few decades the macroeconomic policies and economic growth relationship became the hot issue amongst the government, policy makers and researchers.
It reveals that in developing countries the key macroeconomic determinants of economic growth include foreign aid, foreign direct investment, fiscal policy, investment, trade, human capital development, demographics, monetary policy, natural. However studies on growth have suffered from model uncertainty as theory fails to give a proper empirical model. Foreshadowing the results, the paper finds that apart from growth in the labour force, investment in both physical and human capital, coupled with low inflation and open trade polices, is necessary for economic growth. They also present evidence that suggests that inefficient financial intermediation is. Determinants of innovation and the economic growth of. Consequently, the performance of the sme sector is closely associated with the economic performance of. Human resources growth of population is not always a curse for the society but sometimes it can be a boon as well, increasing population provides opportunity for expanding market base in the terms of demand and supply of goods and services, and more work force for producing such output. Observably, several factors like trade policy regime, quality of human resources, level of domestic. Pdf economic growth of bulgaria and its determinants ivan. Here, you should know that economic growth is an essential but not the only condition for economic development.
In the preceding chapter we examined some major results relating to the unevenness of crosscountry economic growth and also the growth traps through a consideration of the empirical evidence of. This volume is a collection of selected empirical studies on determinants of economic growth in africa. A crosscountry empirical study to be a concise summary of his pioneering work on the factors underlying longrun growth. There are six major factors that determine growth with for of them been grouped under supply determinants and the other two are efficiency and demand.
For a given starting level of real per capita gdp, the. A multivariate regression approach was employed to. New empirical evidence abstract this paper deals with an investigation into the determinants of economic growth in ghana over the period 1975 to 2014. Hundreds of empirical studies on economic growth across countries have highlighted the correlation between growth and a variety of variables. The determinants of economic growth in the philippines. We also examine the reasons for the widening disparities in economic growth rates among countries in. Determinants of economic development economic development. So was colonization itself bad for economic development. Numerous potential growth determinants have been identi. The major determinants of economic growth in the united states are total factor productivity growth, domestic investment growth, and foreign direct investment growth. According to traditional growth theory, the main determinants of longrun economic growth are not influenced by economic incentives. But that investigation is complicated by the fact that country experiences with growth are enormously varied and often confusing. Determinants of economic growth the determinants of economic growth are interrelated factors influencing the growth rate of an economy.
Determinants of economic growth and genuine progress in south korea a thesis submitted in fulfilment of the requirement for the degree of master of business economics and financeresearch. Macroeconomic determinants of economic growth in nigeria. Mihut and lutas 2014 also found that for the 12 new eu member state, the degree of openness and human. Constraints and determinants anton dobronogov and farrukh iqbal working paper 0420 the findings and conclusions of this paper are entirely those of the authors and should not be attributed to the world bank, its affiliated organizations, or to members of its board of executive directors or the countries they represent. Investments are the final determinants of economic growth. The effects of inflation on economic growth and on its macroeconomic determinants muhammad khan to cite this version. It is assumed that the rate of depreciation is four per cent and k. Empirical findings for a panel of around 100 countries from 1960 to 1990 strongly support the general notion of conditional convergence. They find that trends in government consumption, credit to the private sector and the average growth rate of oecd countries have been significant determinants of growth in egypt in the past. There is a growing literature on the determinants of economic growth in cross countries and country specific with.
Almost all the other determinants of economic growth share a symbiotic relationship with investing. Preliminary results for the effect of inflation on economic growth to get a firstpass estimate of the effect of inflation on economic growth, the inflation rate was included over each period as an explanatory variable along with the other growth determinants considered in. However, other mediating variables may also affect the causal relationship between. Ajide1 this paper investigates the role of frazer economic freedom index on fdigrowth relationship over the period spanning 1980 through 2010 using annual time series data. Tolo1 authorized for distribution by vivek arora december 2011 abstract this paper uses a panel of 23 emerging markets for the period 19652008 to study the determinants of per capita gdp growth in the philippines. Determinants of economic growth in developing economies. An empirical analysis fatukasi bayo department of economics adekunle ajasin university, akungbaakoko abstract this study investigates the determinants of inflation in nigeria between 1981 and 2003.
We contrast the super growth of asia with the sluggish growth of the european. Economic growth is often contrasted with economic development, which is defined as the increase in the economic wealth of a country or a particular area, for the welfare of its residents. Determinants of economic growth in a panel of countries robert j. Suppose the data says that former colonies are poorer than nonformer colonies. The study finds that the determinants of economic growth are different when this distinction is used. The determinants of longrun growth steve dowrick 1. Introduction discussions of economic growth usually focus on differences in growth performance. Besides documenting many of the determinants of growth, barro provides. The investigates the factors that influence the growth of small, medium and micro enterprises smmes 2 in botswana. A spatial econometric model is employed over the period. Determinants of economic growth in a panel of countries.
1333 934 228 1442 770 1321 1291 314 1543 565 1437 886 1175 418 1006 1353 432 1504 297 1564 382 699 212 573 81 1144 535 167 553 1055 706 1097 1338 1448