Paper Title
A Note on the Lewis Growth Rule for Ghana
Abstract
This paper evaluates the Expenditure-Savings nexus of Ghana in accordance with the seminal research of Sir Arthur Lewis on how the growth rates of savings and expenditure impact the accumulation of capital and thus spur economic development. Lewis’ research demonstrates that emerging economies can best stimulate rapid economic development by maintaining a growth in savings that exceeds that of expenditure and by investing the surplus in the accumulation of capital. As a take-off strategy for economic development, emerging economies’ expenditure should grow by 5 to 7 percent, whereas savings should grow by 7 to12 percent. The performance of the Lewis Growth Rule relative to Ghana was assessed using data from the Penn World Tables.
Keywords - Development Economics, Growth Rules, African Economies, Caribbean Economies
JEL Classifications: O1, O4, O5, and C5