Distributed Lag Models and Economic Growth: Evidence from Cameroon

This paper studies the intertemporal effects of various economic variables on the cameroonian growth. Using a Geometric Lag Model, we find out that 50% of the total effect of variables used is accomplished in less than half of a year. When we employ a Polynomial Distributed Lag, we find out that even if investment has a positive impact on growth in the current year, but in the presence of government expenditures, this effect becomes negative after one year due probably to the eviction effect. In addition, we find out that the consumption causes economic growth after three years whereas economic growth causes the consumption after only one year. The main lesson from this study is that any economic policy to sustain economic growth must boost in priority investment and foreign direct investment. The government should pursue policies that stimulate production instead to encourage consumption.