Sources of Business Cycles in a Low Income Country | Zendy

Houssa Romain | Zendy; Mohimont Jolan | Zendy; Otrok Christopher | Zendy

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Sources of Business Cycles in a Low Income Country

Author(s) -

Houssa Romain,

Mohimont Jolan,

Otrok Christopher

Publication year - 2015

Publication title -

pacific economic review

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.34

H-Index - 33

eISSN - 1468-0106

pISSN - 1361-374X

DOI - 10.1111/1468-0106.12097

Subject(s) - economics , autoregressive model , commodity , supply shock , benchmark (surveying) , productivity , price shock , business cycle , vector autoregression , monetary economics , sign (mathematics) , shock (circulatory) , demand shock , structural vector autoregression , econometrics , macroeconomics , monetary policy , finance , medicine , mathematical analysis , mathematics , geodesy , geography

We examine the role of global and domestic shocks in driving macroeconomic fluctuations for G hana. We are able to study the impact of exogenous shocks, including productivity, credit supply and commodity price shocks. We identify the shocks using a combination of sign and recursive restrictions within B ayesian vector autoregressive models. As a benchmark we provide results for S outh A frica to document the difference between two economies with similar structures but at different stages of development. We find that global shocks play a more dominant role in S outh A frica than in G hana. These shocks operate through three channels: trade, credit and commodity prices.

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