The Sources of Business Cycles in a Low Income Country

The role of global and domestic shocks in driving macroeconomic fluctuations for Ghana.

From:
Department for International Development
Published
25 February 2015
Country:
Ghana and South Africa
Document Type:
Journal Article
Theme:
Economic Growth
Authors:
Houssa, R, Mohimont, J and Otrok, C.

Abstract

The authors examine the role of global and domestic shocks in driving macroeconomic fluctuations for Ghana. They are able to study the impact of exogenous shocks including productivity, credit supply, and commodity price shocks. They identify the shocks with a combination of sign and recursive restrictions within Bayesian VAR models. As a benchmark they provide results for South Africa to document the difference between two economies with similar structures but different levels of development. They find that global shocks play a more dominant role in South Africa than in Ghana. These shocks operate through 3 channels: trade, credit and commodity prices.

This work is part of the ‘Macroeconomics in Low-income countries’ programme

Citation

  • Romain Houssa, Jolan Mohimont, Christopher Otrok (2015) The Sources of Business Cycles in a Low Income Country IMF Working Paper No. 15/40

  • Houssa, R. , Mohimont, J. and Otrok, C. (2015), Business Cycles Sources in a Low Income Country. Pacific Economic Review, 20: 125-148. doi:10.1111/1468-0106.12097

The Sources of Business Cycles in a Low Income Country - working paper

The Sources of Business Cycles in a Low Income Country - journal article

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Published 25 February 2015
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