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n African Journal of Business and Economic Research - The effects of public spending on private consumption in Lesotho

Volume 8, Issue 2_3
  • ISSN : 1750-4554
  • E-ISSN: 1750-4562

Abstract

The paper provides an empirical analysis of the effects of public spending on private consumption in Lesotho using the multivariate cointegration techniques for the period 1980-2010. The study finds that there is a positive and stable long-term relationship between government spending and private consumption in Lesotho, a result that supports the existence of crowding-in effect between public and private consumption. Therefore, the country seems to enjoy some degree of fiscal flexibility, which could be useful in stimulating private spending and economic growth, especially in times of economic recessions.

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/content/aa_ajber/8/2_3/EJC147365
2013-01-01
2019-10-15

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