TY - JOUR
T1 - Identifying aggregate supply and demand shocks in small open economies
T2 - empirical evidence from African countries
AU - Ahmad, A. H.
AU - Pentecost, Eric J.
PY - 2012/1
Y1 - 2012/1
N2 - This 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.
AB - This 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.
UR - http://www.scopus.com/inward/record.url?scp=80052247298&partnerID=8YFLogxK
UR - http://dx.doi.org/10.1016/j.iref.2011.08.004
U2 - 10.1016/j.iref.2011.08.004
DO - 10.1016/j.iref.2011.08.004
M3 - Article
SN - 1059-0560
VL - 21
SP - 272
EP - 291
JO - International Review of Economics and Finance
JF - International Review of Economics and Finance
IS - 1
M1 - 23
ER -