External shocks and economic activity in DR Congo: a dynamic stochastic general equilibrium (DSGE) analysis

Choc externes et activité économique en RD Congo: application d’un modèle d’équilibre général dynamique et stochastique (DSGE)

Gilles Bertrand Umba

Working Papers from HAL

Abstract: The purpose of this work is to examine the impact of external shocks on economic activity in DR Congo. Using a dynamic and stochastic general equilibrium model, the author simulates four main types of external shocks, namely: (i) the shock on the risk premium; (i) the shock on world inflation; (iii) the global productivity shock; (iv) the global monetary policy shock. Quarterly frequency data was used for the period from January 2005 to December 2017. The results suggest that external shocks leading to a slowdown in global demand have a significant impact on economic activity at the local level. Furthermore, the shock to the world interest rate does not seem to influence domestic economic activity, at least directly. This could be justified by the country's limited financial openness, international trade being the main channel for transmitting external shocks.

Date: 2020-06-11
New Economics Papers: this item is included in nep-dge and nep-mac
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