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Fiscal Stimulus for sub Saharan Africa

Research reports

Written by Dirk Willem te Velde

The global financial crisis will have a major impact on developed and developing countries alike. The developed and richer developing countries have begun to address the consequences of the crisis and have announced various fiscal stimuli. The G-20 countries have announced fiscal stimuli worth around 1.5% of GDP, or some US$ 2 trillion, to cushion the consequences of the global financial crisis. It will matter greatly for poor countries (non-G20) countries, such as African countries, whether part of such a stimulus is provided in poor countries or whether the entire stimulus is kept in the G20. This paper examines the effects of various fiscal stimuli on growth in the world, in developed countries, and sub-Saharan Africa (SSA) and uses a calibrated macroeconomic model of the world economy.

Ray Barrell, Dawn Holland, Dirk Willem te Velde,