Macroeconomic Demographic Model for Sudan an Econometric Approach

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Amin Mohamed Ali, Haleeb
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This thesis attempts to look at the impact of some economic and demographic variables on GDP per capita growth rate, as reflecting the economic development of Sudan, during the period 1960-2004. The methods used in the study are essentially based on a single equation framework where exogeneity and stationarity assumptions are imposed on the variables. This analysis employs a vector autoregressive (VAR) framework where all variables are assumed to be endogenous. Moreover, this approach helps to account for the non-stationarity problems that often characterize time series data. The study also used cointegration analysis to determine rank of cointegration in a system of equation. The use of cointegration analysis and error correction mechanism help in assessing the nature of the short-run dynamics and the long run equilibrium relationship of GDP growth rate and the variables used in the model. The results suggested that primary enrollment, as reflecting the education dimension of human capital, and population growth rate will have a positive impact upon the country’s GDP per capita growth rate, whereas inflation will have a negative impact on the GDP. On the other hand investment appears to have relatively small returns on investment share on GDP growth rate compared to primary enrolment. Note with standing that, the same results were obtained under different model specifications. Rapid population growth rate can be good for the economic development in the short- run. However, for population growth to contribute positively in the long run, the government needs to expand labour market, creating job opportunities and investing in education and thereby, human capital. Moreover, Policies to control inflation are crucial for macroeconomic stability with tolerable economic growth
Macroeconomic, Demographic , Sudan, Econometric Approach