Ahmad, A. H. and Pentecost, E. J., 2012. Identifying aggregate supply and demand shocks in small open economies: Empirical evidence from African countries. International Review of Economics and Finance, 21 (1), 23.
This paper uses a tri-variate structural VAR with a long-run identification scheme, akin to the Blanchard and Quah method, to identify external and domestic supply and demand shocks in 22 African countries between 1980 and 2005. Domestic supply shocks are found to be the most important factor contributing over 70% to output fluctuations in these countries, with external shocks playing a relatively minor role. A partial correlation analysis between the identified shocks and a measure of the fiscal policies of the countries revealed that the fiscal policies pursued by most of the countries during the period are counter-cyclical.
|Item Type ||Articles|
|Creators||Ahmad, A. H.and Pentecost, E. J.|
|Departments||Faculty of Humanities & Social Sciences > Economics|
|Research Centres||Bath Economics Research|
|Publisher Statement||Ahmad_IREF_2012_21_1_23.pdf: NOTICE: this is the author’s version of a work that was accepted for publication in International Review of Economics & Finance. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in International Review of Economics & Finance, VOL 21, ISSUE 1, (2012), DOI 10.1016/j.iref.2011.08.004|
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