Work

The Sources of Business Cycles in a Low Income Country

Year: 2015

Type: article

Abstract: We examine the role of global and domestic shocks in driving macroeconomic fluctuations for Ghana. We are able to study the impact of exogenous shocks including productivity, credit supply, and commodity price shocks. We identify the shocks with a combination of sign and recursive restrictions within Bayesian VAR models. As a benchmark we provide results for South Africa to document the difference between two economies with similar structures but different levels of development. We find that global shocks play a more dominant role in South Africa than in Ghana. These shocks operate through three channels: trade, credit and commodity prices.

Source: IMF Working Paper

DOI: 10.5089/9781498310147.001

Authors: Romain Houssa, Jolan Mohimont, Christopher Otrok

Institutions: University of Namur, University of Missouri, Federal Reserve Bank of St. Louis, KU Leuven

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: bronze

Funder: Department for International Development