| Abstract: | This paper examines the behavioral parameters of the IS equations for eight countries in Sub-Saharan Africa. The empirical results show an overall destabilizing effect rooted in the parameters of the IS functions. The study lends support to the view that recourse to external financing, to balance the I-S gap in the short-run, leads LDCs economies into a state of structural dependency on foreign capital, entailing a reduction in domestic capital formation and growth through an increased reliance on imports and an inefficient allocation of domestic savings. 112, 121] |
