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Identifying aggregate supply and demand shocks in small open economies: empirical evidence from African countries
journal contribution
posted on 2014-01-23, 15:10 authored by Ahmad Hassan AhmadAhmad Hassan Ahmad, Eric PentecostEric PentecostThis paper uses a tri-variate structural VAR with a long-run identification scheme, akin to the Blanchard and Quah method, to identify external and domestic supply and demand shocks in 22 African countries between 1980 and 2005. Domestic supply shocks are found to be the most important factor contributing over 70% to output fluctuations in these countries, with external shocks playing a relatively minor role. A partial correlation analysis between the identified shocks and a measure of the fiscal policies of the countries revealed that the fiscal policies pursued by most of the countries during the period are counter-cyclical.
History
School
- Business and Economics
Department
- Economics
Citation
AHMAD, A.H. and PENTECOST, E.J., 2012. Identifying aggregate supply and demand shocks in small open economies: empirical evidence from African countries. International Review of Economics and Finance, 21 (1), pp. 272 - 291.Publisher
© ElsevierVersion
- AM (Accepted Manuscript)
Publication date
2012Notes
This article was published in the journal, International Review of Economics and Finance [© Elsevier]. The definitive version is available at: http://dx.doi.org/10.1016/j.iref.2011.08.004ISSN
1059-0560Publisher version
Language
- en