Page 529 - 2016 - Vol. 40
P. 529

run causality running from export growth to economic
growth.

       Mahran (2005) argued that effective fiscal policy can
also be used to spur growth and revive a stagnant economy.
What needs to be explored in this respect for a developing
economy is the causal relationship between growth (say, of
real per capita GDP) on the one hand, and quantitative
fiscal adjustment (improvement in the fiscal balance),
consumption expenditure (wages and salaries, development
expenditure, and social services such as education and
health), and sources (domestic and foreign) of financing
budget deficits on the other hand.

       Hassan (2006) calculated the marginal propensity to
absorb to address the issue of devaluation policies in Sudan
as a tool to maintaining the balance of payments. She
applied Ordinary least square (OLS) method to annual data
covering the period (1982 - 2005). To calculate the
marginal propensity to absorb (MPA) she used real
consumption, real investment and real government
expenditure, Then she estimated the elasticity of
absorption, and used it to calculate the marginal propensity
to absorb. Her empirical results provide strong evidences

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