Macroeconomic instability in Afghanistan: causes and solutions

Omar Joya

MPRA Paper from University Library of Munich, Germany

Abstract: This dissertation contributes to an increasing literature on macroeconomic instability in developing countries. It makes a critical review of the literature and classifies the sources of instability under exogenous and endogenous factors. It then argues that the impact of exogenous shocks is determined by the structural characteristics of the economy which act as a risk-management mechanism. The paper also explains that macroeconomic instability is both a cause and a reflection of underdevelopment. Whilst macroeconomic instability constraints the long-term growth and thus development, it is also the result of the co-existence of various ‘underdeveloped structures’ in the economy. The paper also presents a case study on Afghanistan. Through a diagnostic approach, it identifies the sources of instability in the country and proposes a series of policies and reforms in order to overcome macroeconomic instability in Afghanistan.

Keywords: Macroeconomic stability; Macroeconomic volatility; Macroeconomic instability; Developing countries; Afghanistan; Diagnostic approach; Policy analysis (search for similar items in EconPapers)
JEL-codes: E32 E60 O11 O53 Y40 (search for similar items in EconPapers)
Date: 2011-09
New Economics Papers: this item is included in nep-mac
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/37658/1/MPRA_paper_37658.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:37658

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().