The correlation (cointegration) analysis between fiscal policy or macroeconomic variables as independent variables and economic growth (Real DGP), Unemployment and poverty reduction as dependent variables must be backed by a theoretical framework. (1) in theory, aggregate demand in the economy determines the output level (and hence employment level). Components of the Aggregate Demand includes Consumption expenditure, Investment, government and net experts. In developing economies (including Namibia the case study), Investment, government, and net exports play a very crucial role in determining output and employment levels. (2)Similar to the level and composition of aggregate Demand, the level of government expenditure and its composition is important in determining output and employment levels. This study should use (1) and (2) to formulate an economically sound framework for empirical validation.
The following instructions must be included as follows:
1. At least 3 or 4 research hypotheses, objectives and questions must be tested, achieved and answered: a) Macroeconomic variables/fiscal policy (to be carefully identified) influence on economic growth.-b) The said variables impact on unemployment.-c)And the said variables impact on poverty reduction.
2. The role of GNP expenditure should be clearly shown within a macro-economic model.
3. There should be a discussion on the structure of the Namibian economy and employment generation capacity of various economic sectors.
4. Realising that economic growth, employment level and poverty (dependent variables) are influenced by many factors. Not only fiscal. So this element or aspect should be visualized in a broader macroeconomic framework.
5. A theoretical/conceptual model which explains economic growth and employment in Namibia(macro-economic framework) should be included
6. The role of the government expenditure (budget) needs to be clearly shown.
7. The estimating equations should be derived in the theoretical model /framework.
8. There should be a discussion of the famous Robert M. Solow and the new theories of economic growth.
9. Normally economic growth (and its structural composition) affects the employment levels. The study must show how the role of government expenditure affects (1) growth contribution, (2) employment generation variables.
10. The analytical framework should not only focus on government sector but also investment levels which play a crucial role in determining output levels
11. The Literature Review should focus on the theoretical framework for macroeconomic performance. The said LR should be critical contrasting arguments of various studies rather than a list of studies.
12. In developing economy (Namibia), Aggregate demand is not the issue but various factors influencing the economic growth and employment.
13. Independent variables to be used in the study to explain economic growth, employment and poverty (dependent variables) should adequately represent supply side or demand side of the economy.
14. Research Methodology and data analysis should perform testing for stationarity, Dickey-Fuller and the Augmented Dickey-Fuller test, Co-integration and Vector Error Correction Model(VECM), Johansen technique based on VAR, Diagnostic checks, Philip Peron, Jacque Berra and Multicolineality etc. Time series: 1980-2010. Collected data is to be expressed in constant US dollars. World Bank data ( are to be used to obtain necessary data for the sample period between 1980 and 2010 Research Methodology must meet publishable standards. This is not a qualitative method thus survey, interview must be ignored.