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Title: The impact of fiscal and monetary policy on economic growth in Southern African Custom Union: a panel ARDL approach

Authors: Nkosinathi Emmanuel Monamodi; Ireen Choga

Addresses: Department of Economics, Faculty of Economic and Management Sciences, North West University, North West, South Africa ' Department of Economics, Faculty of Economic and Management Sciences, North West University, North West, South Africa

Abstract: This study investigates the impact of fiscal and monetary policy on economic growth in (SACU) economies between 1980 and 2017. Panel auto regression distributed lags (PARDLs) estimation technique and Pooled mean group (PMG) estimator were utilised in this study. The results indicate that these policies influence economic growth significantly across SACU economics in the long run. However, fiscal policy is only significant if government expenditure is used as the functional policy instrument rather than government revenue. The short run effects of these macroeconomic policies are mixed. Granger causality results indicate that the direction of cointegration is from government, real interest rate, inflation and official exchange rate to economic growth.

Keywords: economic growth; fiscal policy; monetary policy; panel auto regression distributed lag; PARDL; Southern African Custom Union; SACU; Pooled mean group; PMG.

DOI: 10.1504/IJEPEE.2022.120059

International Journal of Economic Policy in Emerging Economies, 2022 Vol.15 No.1, pp.86 - 102

Received: 07 Mar 2019
Accepted: 21 Mar 2020

Published online: 06 Jan 2022 *

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