Does fiscal policy stimulate economic growth in Ethiopia? ARDL approach

In recent years, a vast literature has appeared on the relationship between fiscal policy and long-run economic growth. With aim to give an overview of discussion establish point departure for future research, this study used time series techniques rigor empirical model investigate link various components Ethiopia’s growth annual data 35 years. It employed autoregressive distributed lag estimation technique. Results from bound tests showed that there was variables. Disaggregating government expenditure into productive unproductive tax revenue distortionary non-distortionary, found non-distortionary be neutral as predicted by theory. Moreover, positive effect while evidence effects taxes. These results right signal topolicymakers in Ethiopia formulating policies ensure expenditures are reduced at same boosting public investment. Furthermore, is need encourage private investment country.