Saving and investment in less developed countries (LDCs) : the experience of Malawi

Chisiano, Gertrude Happiness Mlachila. (1994). Saving and investment in less developed countries (LDCs) : the experience of Malawi Master's Thesis, School of Economics, University of Queensland.

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Author Chisiano, Gertrude Happiness Mlachila.
Thesis Title Saving and investment in less developed countries (LDCs) : the experience of Malawi
School, Centre or Institute School of Economics
Institution University of Queensland
Publication date 1994
Thesis type Master's Thesis
Total pages 84
Language eng
Subjects 14 Economics
Formatted abstract
Many Less Developed Countries have low savings, low investment and declining per capita gross domestic product. In addition, there is greater reliance on foreign capital. However, the foreign capital is declining. These countries have to examine the domestic economy and find ways of improving the growth rate of the economy. Capital formation through saving and investment can assist in economic growth.

This study employs the Harris (1979) model (a hybrid of two models; the Chenery and Strout (1966) two-gap model and the McKinnon-Shaw (1973) model) to determine what could be done in Less Developed Countries to boost domestic savings and investment. The two-gap model identifies the two major constraints on economic growth (lack of domestic saving and lack of foreign exchange) while the McKinnonShaw model examines the effects of a financially repressed economy on domestic savings and domestic investment.. The empirical analysis is done using lagged time series data for the Malawian economy for the sample period 1971 to 1993. The results reveal that the dominant constraint on economic growth in Malawi is inadequate domestic savings which is further aggravated by a financially repressed economy and a weak entrepreneur class. The Malawi financial system is discussed and policy recommendations made.

Document type: Thesis
Collection: UQ Theses (non-RHD) - UQ staff and students only
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Created: Thu, 21 Oct 2010, 11:49:22 EST by Ning Jing on behalf of The University of Queensland Library