Martha Munthali - Academia.edu (original) (raw)
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Economic growth is an important index among the macroeconomic variables. It plays an integral rol... more Economic growth is an important index among the macroeconomic variables. It plays an integral role in the economic development of a country and the general improvement of living standards. It is therefore important to understand the factors which drive economic growth in an economy. The research reported here analyzed the determinants of economic growth in Malawi. Regression analysis was applied to secondary data from the International Monetary Fund, for the period 1971 to 2003. Economic growth was also positively correlated with the exchange rate, population growth, and foreign direct investment. Statistically, it was population growth, exchange rate and domestic credit which were significantly related to economic growth. It was of interest to observe that there was a negative relationship between economic growth and private investment. JEL Classification: E62, F14, O4
The objective of the study was to identify the determinants of economic growth in Malawi using ti... more The objective of the study was to identify the determinants of economic growth in Malawi using time series data from 1970 to 2003. Though economic policies aimed at enhancing economic growth were implemented in Malawi, the economic performance has not been satisfactory hence the study seeks to find out what really determines economic growth in Malawi. The study bases its theoretical framework on Standard Endogenous Growth Approach of Rebelo (1991). The study also adopted model specification of Rao (2006), in which economic growth depends on investment, human capital, debt, terms of trade, degree of openness and inflation. An Error Correction Model was specified and estimated using Ordinary Least Squares (OLS) technique after subjecting the model to statistical and diagnostic tests. The study has identified human capital, investment, and terms of trade, degree of openness as the main determinants of growth in Malawi. This implies that in order to boost economic growth in Malawi, policies and resources should be directed at expanding export through diversification and also adding value to exports in order to improve terms of trade. Furthermore, improving levels of human capital and increasing investment levels have a significant impact of levels of growth in Malawi.
Economic growth is an important index among the macroeconomic variables. It plays an integral rol... more Economic growth is an important index among the macroeconomic variables. It plays an integral role in the economic development of a country and the general improvement of living standards. It is therefore important to understand the factors which drive economic growth in an economy. The research reported here analyzed the determinants of economic growth in Malawi. Regression analysis was applied to secondary data from the International Monetary Fund, for the period 1971 to 2003. Economic growth was also positively correlated with the exchange rate, population growth, and foreign direct investment. Statistically, it was population growth, exchange rate and domestic credit which were significantly related to economic growth. It was of interest to observe that there was a negative relationship between economic growth and private investment. JEL Classification: E62, F14, O4
The objective of the study was to identify the determinants of economic growth in Malawi using ti... more The objective of the study was to identify the determinants of economic growth in Malawi using time series data from 1970 to 2003. Though economic policies aimed at enhancing economic growth were implemented in Malawi, the economic performance has not been satisfactory hence the study seeks to find out what really determines economic growth in Malawi. The study bases its theoretical framework on Standard Endogenous Growth Approach of Rebelo (1991). The study also adopted model specification of Rao (2006), in which economic growth depends on investment, human capital, debt, terms of trade, degree of openness and inflation. An Error Correction Model was specified and estimated using Ordinary Least Squares (OLS) technique after subjecting the model to statistical and diagnostic tests. The study has identified human capital, investment, and terms of trade, degree of openness as the main determinants of growth in Malawi. This implies that in order to boost economic growth in Malawi, policies and resources should be directed at expanding export through diversification and also adding value to exports in order to improve terms of trade. Furthermore, improving levels of human capital and increasing investment levels have a significant impact of levels of growth in Malawi.