ABSTRACTAchieving a high and stable economic growth rate is an important issue for every country since economic growth is crucial for economic development. Since savings and investments are key to economic growth, this study aimed at examining the relationship between gross domestic savings, investments, and economic growth in Ghana between …
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ABSTRACTAchieving a high and stable economic growth rate is an important issue for every country since economic growth is crucial for economic development. Since savings and investments are key to economic growth, this study aimed at examining the relationship between gross domestic savings, investments, and economic growth in Ghana between the period 1980— 2016. The researchers adopted explanatory and empirical research approaches. This study used secondary data of all the variables including economic growth, gross domestic savings (gross savings as a percentage of GDP), and gross domestic investment (gross capital formation as a percentage of GDP) of the economy and covers the period from 1980-2016 and are taken from official sources, the World Bank Development Indicators. The study employed inferential statistics that focused on multivariate regression analysis with emphasis on multiple linear regression. The study observed a negative relationship between economic growth and savings. However, a positive correlation between economic growth and investment was found. Another positive relationship between savings and investment was observed. The regression found that savings had a positive and insignificant interaction with economic growth, but investment had a positive and significant interaction with economic growth. The unit root test conducted confirms that the variables (economic growth, savings and investments) are stationary in first difference and the co-integration tests also confirm the existence of long run relationship between the variables. Therefore, measures that will increase domestic savings and domestic investments should be adopted.
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