Presentation Eric GANDAHO
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Transcript of Presentation Eric GANDAHO
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Economic performance in
ECOWAS: An empirical study
on panel data
By Eric GANDAHOECOWAS & ISSEA, Yaound
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Introduction
Empirical studies on economic growth have been oneof the most important links in the economic research.
Understand the source of the Wealth of Nations is one
of the oldest researches
This research area has been updated by the work ofRomer (1986) and Lucas (1988) and the development
of applied econometrics
it is therefore important to explore these newdevelopments in research on economic growth
especially for ECOWAS countries
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Introduction cont
identify the sources of economic growth
for the ECOWAS countries ,
develop a composite indicator of economic
performance in order to assess the effortsmade by each country of ECOWAS
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Econometric analysis of the
sources of economic growth in
ECOWAS
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Data source
Data source: Word Development Indicator 2007
Our study period extends from 1971 to 2005.
We will consider periods of 5 years1971-1975,
1976-1980; ... , 2001-2005 In each period, we calculate the average of
each variable in our model. It is this average
which is used in the estimation.
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Methodology
Our model contains three equations which
are estimated simultaneously by the
method of triple least squares.
In the first equation, the growth of GDP
per capita will be explained by:
level of GDP in the beginning of period (in
logarithm)
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Methodology.cont
rate of investment growth rate of exports
inflation rate
budget deficit as a percentage of GDP And the exchange rate
In the second equation, the investment rate is
explained by:
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Result
Table 1: estimate results
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Result ..cont
According to our finding, investment and growth
of export have a significant and positive effect
on GDP growth.
But The effect is however more important forinvestment than exports
The results confirm also the negative effect of
inflation.
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Result ..cont
The regression of investment confirms thenegative effect of instability
However, factors such as savings rate and
money supply have a positive effect oninvestment
the regression of export growth confirms the
positive effect of the level of investment on
exports
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Construction of an economic
performance indicator
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Methodology
We use a sample of 14 ECOWAS countries
during the period 1995-2004 (ten years)
Our economic performance indicator will take
into account the dimension of level, durationand variability
it will be constructed by using the method of
Principal Component Analysis (PCA) withvariables such as :
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Methodology cont
the growth rate of GDP per capita The number of years with positive growth
of GDP per capita during the previous ten
years; The number of consecutive years with
positive growth over the same period;
The number of years with high inflation(above 40%) during the previous ten
years;
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Results
Several ECOWAS countries have a negative value of the indicator
during the period.(Seven countries)
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Result ..cont
In addition we observe a general
downward trend in all countries, reflecting
a deterioration of conditions.
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Conclusion and discussion
Investment is an important factor of economicgrowth in ECOWAS countries
Moreover, the positive effect of export growth also
confirms that it would be important to improve the
policies of openness, for example by increasing
trade between the countries of the area.
The promotion of human capital including the
improvement of education, the establishment of qualityinfrastructure is also challenge.
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Acknowledgments
ACOWAS Commission
ISIBALO
Statistics South Africa
Thank you