Abstract: Aware of the widening fiscal deficit in Kenya, we seek to identify the threshold level of fiscal deficit by employing an annual dataset for the period 1985 to 2015 to estimate the threshold model for Kenya. We find that fiscal deficit, investment, secondary school enrollment, financial deepening and degree of openness to the economy to be positive and significant for growth in Kenya. We also find that the fiscal deficit is good for growth and identified a threshold fiscal deficit level of 5 percent of GDP for the period covered.
Keywords: Deficit: Debt: Economic: Fiscal: Kenya: Threshold.
Title: Threshold Fiscal Deficit on Economic Growth in Kenya
Author: Stella Chebiwott, Antony Mwangangi
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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