Growth Linkages, Price Effects and Income Distribution in Sub-Saharan Africa

This paper measures economic linkages emanating from investment-ledgrowth in eight different African countries with widely varyingeconomic structures. To explore the importance of price effectsin estimating these linkages, the paper employs two differentmethodologies for measuring the linkages, a fixed-price semi-input–output(SIO) model as well as a fully price-endogenous computable generalequilibrium model (CGE). Regardless of the methodology used,indirect effects prove to be large. On average — acrosscountries and sectors — inclusion of growth linkages nearlydoubles estimated national income growth following an initialinvestment-led shock. Sectorally, investments in agriculturegenerate the largest impact on the poor.