 Trade Shocks and Macroeconomic Fluctuations in AfricaAyhan Kose and Raymond Riezman CSGR Working papers series from Centre for the Study of Globalisation and Regionalisation (CSGR), University of Warwick Abstract: This paper examines the role of external shocks in explaining macroeconomic fluctuations in African countries. We construct a quantitative, stochastic, dynamic, multi-sector equilibrium model of a small open economy calibrated to represent a typical African economy. In our framework, external shocks consist of trade shocks, modeled as fluctuations in the prices of exported primary commodities, imported capital goods and intermediate inputs, and a financial shock, modeled as fluctuations in the world real interest rate. Our results indicate that while trade shocks account for roughly 45 percent of economic fluctuations in aggregate output, financial shocks play only a minor role. We also find that adverse trade shocks induce prolonged recessions. Keywords: Trade shocks; dynamic stochastic quantitative trade model; African economies. (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:wck:wckewp:43/99 Access Statistics for this paper More papers in CSGR Working papers series from Centre for the Study of Globalisation and Regionalisation (CSGR), University of Warwick Centre for the Study of Globalisation and Regionalisation (CSGR) University of Warwick Coventry CV4 7AL, U.K.. Contact information at EDIRC. |
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