Government expense, Consumer Price Index and Economic Growth in Cameroon

Abstract

This paper examines the relationship among consumer price index (CPI), economic growth and government expenditure, in case of Cameroon. The study employs many econometric tools to explore such relationship. And our findings suggest that there is a long term relationship between CPI, economic growth and government expenditure. Government expenditure has positive effect on growth. The study finds that in the short run CPI and government expenditure positively affect economic growth. To supplement these findings, we assess the causal relationships between variables using the Granger causality test. The results indicate that in the long-run economic growth Granger causes government current expenditure and; CPI Granger causes government current expenditure but no feedback relationship is observe