presentation eric gandaho

8/3/2019 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

presentation eric gandaho

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