Jidoud, Ahmat (2012) The Sources of Macroeconomic Fluctuations in Subsaharan African Economies: An application to Côte d'Ivoire. TSE Working Paper, n. 12-346

Preview

Text Download (482kB) | Preview

Abstract

This paper quantifies the empirical importance of various types of relevant shocks in
explaining macroeconomic
uctuations in a typical Sub{saharan African economy (C^ote
d'Ivoire) in the context of a Dynamic Stochastic General Equilibrium (DSGE) model
and Bayesian techniques. Our analysis first documents that transitory but persistent
productivity shocks are the dominant sources of macroeconomic volatility as they explain
more than half of aggregate
uctuations. Second, world interest rate shocks are found to
be non{negligible especially in driving
uctuations in consumption growth. Third, while
fiscal policy is found to be procyclical, fiscal shocks play a minor role in this economy. In
addition, negative productivity shocks coupled with positive world interest rate shocks are
at the origins of the poor macroeconomic performances of the economy in the 80s. These
findings are in line with the business cycle literature on African economies and also robust
to various perturbations of the benchmark set-up.