Trade Regimes, Liberalization and Macroeconomic Instability in Africa
Chantal Dupasquier and
Patrick Osakwe ()
Additional contact information
Chantal Dupasquier: UN Economic Commission for Africa, Addis Ababa, Ethiopia
SCAPE Policy Research Working Paper Series from National University of Singapore, Department of Economics, SCAPE
Trade policy has been a very contentious issue in the discourse on African development. Using panel data for 33 African countries spanning the period 1986-2000, we examine the relationship between trade liberalization and macroeconomic instability in Africa. We focus on instabilities in output, consumption and investment, and use both single and system estimation techniques as well as different measures of trade regimes. After controlling for key potential sources of macroeconomic instability, we find no substantial evidence that trade liberalization has a systematic impact on instability in the region. The study shows that the volatilities of inflation and the terms of trade, as well as climatic disasters, the nature of fiscal policy, and the severity of debt are more robust determinants of macroeconomic instability in the region. The paper also argues that policymakers in the region can reduce macroeconomic instability and vulnerability to shocks by diversifying their export structures, using fiscal policy in a countercyclical manner, and improving the functioning of the financial sector.
Keywords: instability; openness; trade regime; Africa; macroeconomic; panel data (search for similar items in EconPapers)
JEL-codes: F13 O24 O55 (search for similar items in EconPapers)
Pages: 29 pages
New Economics Papers: this item is included in nep-afr, nep-int and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Working Paper: Trade Regimes, Liberalization and Macroeconomic Instability in Africa (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:sca:scaewp:0604
Access Statistics for this paper
More papers in SCAPE Policy Research Working Paper Series from National University of Singapore, Department of Economics, SCAPE Contact information at EDIRC.
Bibliographic data for series maintained by (). This e-mail address is bad, please contact .