Macroeconomic Shocks and Aggregate Welfare in Sub-Saharan African Countries

Evelyn Nwamaka Ogbeide-Osaretin () and Victoria Nkiruka Ishiwu
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Evelyn Nwamaka Ogbeide-Osaretin: Department of Economics, Edo University Iyamho, Edo State, Nigeria
Victoria Nkiruka Ishiwu: Department of Economics, University of Nigeria, Nsukka, Enugu State, Nigeria

Business & Management Compass, 2021, issue 4, 380-396

Abstract: This research investigates the outcome of various macroeconomic shocks on the welfare of Sub-Saharan African countries. Data on real private per capita consumption expenditure as a measure of welfare, terms of trade, RGDP per capita, unemployment rate, inflation, government expenditure, and official development assistance were used for the time 1980 to 2019 on ten less-developed countries in Sub- Saharan Africa. The PVAR estimation method was used as there was no presence of long-run association established amidst the variables confirmed by Pedroni’s panel cointegration tests. The result indicated that a surge in both internal fiscal shocks and external shocks (terms of trade) boosts welfare, while official development assistance does not improve welfare in these countries. We, therefore, advocate the intensification of pro-poor government expenditure and official development assistance. Diversification into non-primary exports is also imperative.

Keywords: Macroeconomic Shocks; Welfare; Sub-Saharan Africa; panel VAR (search for similar items in EconPapers)
JEL-codes: E62 I31 O11 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:vrn:journl:y:2021:i:4:p:380-396

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