Determinants of Growth Spells: Is Africa Different?

Charalambos Tsangarides

No 2012/227, IMF Working Papers from International Monetary Fund

Abstract: Do growth spells in Africa end because of bad realizations of the same factors that influence growth spells in the rest of the world, or because of different factors altogether? To answer this question, we examine determinants of growth spells in Africa and the rest of the world using Bayesian Mode Averaging techniques for proportional hazards models. We define growth spells as periods of sustained growth episodes between growth accelerations and decelerations and then relate the probability that a growth spell ends to various determinants including exogenous shocks, physical and human capital, macroeconomic policy, and sociopolitical factors. Our analysis suggests that determinants of growth spells in Africa are different from those in the rest of the world. The majority of the identified robust determinants have a distinct impact in only one of the two samples: initial income, terms of trade, exchange rate undervaluation and inflation, influence spells only in the world sample, while openness and droughts seem to only affect Africa. In addition, a few common determinants - proxies for human and physical capital and changes in the world interest rate - have very different marginal effects in the two samples.

Keywords: WP; growth spell; International Growth; survival analysis; robustness; Bayesian Model Averaging; Africa sample; growth experience; exchange rate; spells in Africa; world sample; interest rate; per capita income; Personal income; Terms of trade; Human capital; Exchange rates; Oil prices; Africa; Sub-Saharan Africa; Asia and Pacific (search for similar items in EconPapers)
Pages: 32
Date: 2012-09-01
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Citations: View citations in EconPapers (8)

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