An application of Solow's growth model: Case of sub-Saharan Africa

Maureen Sarahjane Miller, University of Nevada, Las Vegas


This study is prompted by the growing concern over the poor economic performance of Sub-Saharan Africa (SSA) relative to the rest of the world over the past decade. The purpose of the study is to examine how a simple and predictable model like Solow's model can explain per capita income in SSA. Our study consists of cross-sectional-cum-time-series regressions using 32 SSA countries. The time span considered is a 26-year period from 1960 to 1985. The model is based on the empirical framework developed by Mankiw et al. (1992). Our results show that saving has a significantly positive impact on per capita GDP in SSA, while population growth rate, though consistently negative, is significant only at higher levels of data disaggregation. Our findings are consistent with Mankiw et al.'s (1992) which confirm Solow's predictions that saving has a positive effect on per capita income whereas population growth has a negative effect.